The rise in markets in the first quarter of 2019 almost completely reversed the falls during the final few months of 2018. That’s what markets do – they reflect the ebbs and flows of sellers and buyers. Despite these swings MMPI’s investment products had another successful quarter – this time with 2 early maturities.
The MMPI Escalator Plan Series 45A, which tracked the performance of the EuroStoxx50 index, matured early after just one year paying 103.10% – that’s a return of capital plus growth of 3.10%. The product was assessed as risk score 4 on the 1-7 risk scale using European regulator guidelines (ESMA). A risk score of 4 implies that the capital is more at risk than, say, a bank deposit (risk score 2). The conditions of this product meant that the investors’ capital was 100% secure provided the index did not fall by more than 40%. At its worst point, the index fell by only 15% but, regardless, it returned 103.10% after just 12 months.
MMPI also promotes bespoke products for private clients. One of these products also had an early maturity in 2019 Q1. It tracked the performances of the STOXX Europe 600 Utilities and the iShares MSCI Canada indices. The product paid out 107.95% after just 18 months. The capital protection was again subject to a fall of 40% or more but this was never in danger. Its lowest point was -5%.
The MMPI Escalator Plan Series 45B (a sister product of 45A), tracking the EuroStoxx50 and the Nikkei225, narrowly missed out on an early maturity – but it will have another chance in August this year.
It remains the case that just 4 of MMPI’s investment products out of a total of 51 maturities, stretching back over 10 years, have returned less than 100% of the initial capital invested and these were pre-determined downsides at 5% – 10% of the initial capital.
MMPI recognises that capital security is very important for investors. In the cases cited above the protection was provided by BNP Paribas, one of Europe’s best capitalised banks. The bank currently has a top-quality credit grade and a stable rating, which is 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 MMPI recommends 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 have come to 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 early redemptions, 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/
