Merchant Capital offers second EM kick-out plan

Merchant Capital has launched the second tranche of its Kick Out plan: Emerging Markets.

The three-year structured product is linked to the iShares MSCI Brazil Index fund and the Hang Seng China Enterprises index.

At the end of each six month period, if both the underlying indices are 5% or more above their initial levels, the plan matures early and offers a growth payment of 7% for each completed six month period from the start date to maturity, subject to counterparty risk.

Return of capital at the end of the term is dependent on the performance of the two underlyings and is not guaranteed.

If either has decreased by more than 50% from its initial level measured on maturity only, investors will lose some or up to all of their capital.

Barclays Bank serves as counterparty for the plan.

Director of structured products John Gracey says: "The plan offers investors significant upside driven by two of the most important BRIC emerging markets, Brazil and China.

"There is considerable doubt as to the prospects for the more mature markets of USA and Europe, but the consensus is that prospects for growth in the emerging markets are stronger and more certain."

The plan is open for investment until 7 October 2010, subject to a minimum of £5,000. It is available for direct investment only, with commission at 1.5%.