Another good week for the MMPI Escalator Series of investments with a pay-out of 7.60% gross after just one year coming from the MMPI Escalator Plan Series 28B.
The product was invested in the EuroStoxx50 index and took advantage of a dip in the markets in early 2016 when the price was initially set. As usual MMPI was careful to promote the investment as a balanced risk – highlighting that capital security was not guaranteed. The risk score of Series 28B on MMPI’s 1-7 risk scale was 4; two notches above the deposit account score of 2.
More and more consumers are tiring of the excessively low interest rates being offered by deposit rates and are conscious of their need to accept slightly more risk in return for potentially higher rewards. It is tempting to make a comparison between a 12-month deposit account earning close to zero and the Series 28B account, which paid a handsome 7.60% gross in the same timeframe. But, of course, direct comparisons are unfair and have the potential to be highly misleading.
Suffice to say that investors in Series 28B knew full well that they would receive 7.60% after 12 months if the EuroStoxx50 price rose from its initial level. There is no doubt that what turns many consumers away from stock-market investments is the real chance of losing a large chunk of their money. The old catch phrase cleverly warned “Be prepared to invest but only what you can afford to lose.”
These are wise words and should not be forgotten. However, investments such as the MMPI Escalator Series are not like traditional stock-market investments – they offer much more capital protection – not full guarantees but added protection nonetheless. Enough capital protection to score a 4 whereas a pure investment in the stock-market scores a 7!
With interest rates set to stay low for quite some time consumers will be forced to explore alternative options to traditional deposit accounts. MMPI believes that its Escalator Series provides real choice. As we mentioned, Series 28B matured on Monday last with a pay-out of 7.60% gross after just 12 months – but what of Series 28A – how is it faring? Well that matured last August returning 4.40% after only 6 months. This equates to 9.00% per annum. So all in all Series 28 has been very rewarding for MMPI investors – as have many other of MMPI’s branded products. The only negatives in the records are 4 products out of 27 that paid back no return to investors and returned pre-determined losses of between 5% and 10%. Risk-reward probabilities like that are very difficult to match.
If you believe in taking a little more risk with a part of your investments the MMPI Escalator Series may well be suitable for you. The latest offering is the MMPI Escalator Plan Series 36B provides for a potential return of 8% in one year – while 36A offers 4% even if the price of the underlying measure falls by 10%.