Structured product gives you exposure to emerging markets

A NEW structured investment product by Investec is targeted at emerging markets, in which there has been a recent dramatic upswing.

Last year, the MSCI Emerging Markets Index rose 37.28% in US dollars compared with the MSCI World Index, which rose 22.4%.

However, emerging markets have historically been volatile.

Investec has designed the Emerging Markets Digital Plus that gives you exposure to the iShares MSCI Emerging Market ETF, offering both enhanced returns and reduced downside risk.

Brian McMillan of Investec Structured Products says: “South African investors might see the opportunity in these markets but have questions about the sustainability of returns. The capital protection, therefore, gives them the confidence to diversify their portfolios but with an added level of comfort.”

The Emerging Markets Digital Plus is a three-and-a-half-year randbased investment. At maturity, if the iShares MSCI Emerging Market ETF is up as little as 0.1%, you will earn a minimum return of 35%. You will earn the full upside above 35% if the ETF returns more than that.

If the ETF is down, you will get full capital protection, as long as it does not end down more than 30%. Beyond a negative 30% return, you will have full downside risk.

Investec’s Emerging Markets Digital Plus closes for investment on March 23. – Staff Reporter