The MMPI Escalator suite of investments produced another set of very pleasing outcomes for very satisfied investors in Q3 2018. This was achieved in the face of a generally flat market performance throughout much of the quarter and increased geopolitical tensions on trade tariffs.
The MMPI Escalator Plan Series 39A matured early after 12 months paying a return of 104.00%. This investment provided 100% capital security once the EuroStoxx 50 index did not fall by 40% or more. The capital-protection level was never threatened throughout the 12 months.
The MMPI Escalator Plan Series 39B matured early after 12 months paying a return of 106.00%. This investment also provided 100% capital security once the EuroStoxx 50 index did not fall by 40% or more. Here too the capital-protection level was never, ever threatened.
The MMPI Escalator Plan Series 40A produced 104.60% return after 12 months tracking the performance of a basket of shares [GlaxoSmithKline; BMW and Munich Re]. The capital protection remained solidly intact throughout the term of the investment. The conditional pay-out was set at very attractive levels meaning that the shares could fall by up to 15% and investors were still entitled to a full return of 104.60%.
The MMPI Escalator Plan Series 40B returned a whopping 107.30% after just 12 months tracking the performance of the same basket of shares as Series 40A. Investors’ capital was secure throughout the 12 months. The higher return was achieved by restricting the shares to a potential 10% fall in value. In reality, all shares rose from their initial levels and the return of 107.30% looked safe for several months.
These are very healthy returns when one considers that bank deposits continue to pay close to zero. On a risk scale of 1-7, MMPI assesses bank deposit accounts as a 2; while Series 39 and Series 40 both scored 4 – a little higher risk for much better returns.
Not all of the MMPI products that had observations in 2018 Q3 successfully kicked-out. The MMPI Escalator Plan Series 16 (Options A, B & £Stg), Series 20B, Series 23 and Series 24A all rolled over to fight another day.
Just 4 of MMPI’s investment products out of a total of 50 maturities, stretching back over 8 years, have returned less than 100% of the initial capital invested and these were pre-determined downsides at 5% – 10% of the initial capital.
Capital security is very important for investors. In the cases cited above the protection is provided by either BNP Paribas or Credit Suisse, two of Europe’s best capitalised banks. They have current credit ratings of A+ and A- respectively, which are well ahead of the Irish banks.
We realise that the MMPI Escalator Series of investments is not for everybody. But the investments do represent an excellent opportunity to beat deposit returns. There is additional risk associated with the Escalator Series and this needs to be adequately borne in mind and understood.
As always we recommend that potential investors should read the product brochure where a full list of WARNINGS is provided. Specific professional advice, offered by MMPI in private consultation, should always be sought in relation to individual circumstances.
MMPI will continue to take soundings from investors as to their investment preferences. To-date, investors have been most concerned about achieving income in a low interest rate environment. Many now realise that deposit returns are not keeping pace with inflation and that this position is unlikely to change in the next few years.
Investors are also concerned about access to funds in case of emergency or where personal circumstances take an unexpected turn. Investments in the MMPI Escalator Series have a nominal 5-year term but each investment also contains daily liquidity. This means that the funds may be redeemed at any time during the investment term. Some early redemptions may mean that investors will not get back all of the money they invested but there are plenty of other examples where investors, requiring access to funds, are in a position to receive 100% of their initial capital plus additional positive growth.
Should you require further details about any aspect of the MMPI Escalator suite of investment products please call the office on (01) 66 88 322 or e-mail invest@mmpi.ie. Full details are available on our website at https://www.mmpi.ie/investments/investment-products/
