Dawnay Day Quantum

Dawnay Day Quantum has just closed yet another tranche of its European Stockmarket Maximiser range. We’ve already featured this product before but it’s worth repeating some of the big positives....

• 1000% or 10X participation in the upside of the Euorland Dj EuroSTOXX 50 index upto a maximum 60% return
• Followed by 175% participation in the index growth above 60%
• Plus 100% capital protected unless the index falls by more than 50% from its initial level
• No currency risk#6 year term with the strike date on September 14th 2007 and maturity 16th September 2013
  

It’s important to say at this point that this is NOT a listed product – you can’t go to your stockbroker and deal on this product in the open market (as you can with competitor Merrill Lynch who do offer a secondary market in their products). This is an enormous disappointment because the terms on this product are just so good – we don’t see how you could design a better fund that will offer growth from Europe.

To be fair to Dawnay Day it does offer some listed funds that can be dealt via stockbrokers but these are sold in units of £250,000 or more – we’ll report back on these funds next week. But in the meantime if you want access to this deal you’ll have to talk to your IFA and buy the product like you would any other high street structured product.

Which brings us very quickly to our central point – here’s a cracking product, with a superb risk profile and participation rates offered through IFAs. There should be nothing surprising about this statement except that in our humble opinion just about every structured product offered through an IFA (and not listed on the market) is rubbish.

This may seem a sweeping statement but the Tracker101 website doesn’t bother to write about non-listed products because in our view they’re not worth the bother. The participation rates are usually terrible (you’ll be lucky to get above 100%) and you’re locked in for the full term of five or more years with no secondary listing. In our view almost without exception you’ll get better deals from more specialist listed products – they’ll require a little more legwork and badgering of your broker but the effort is worth it. Listed structured products – our Tracker Plus products – are usually aimed at high net worth individuals who are more discerning and more demanding than high street investors – they wouldn’t dream of accepting the deals on offer on the high street. They want flexibility and decent terms – if they don;t get they won’t invest or they’ll sell in the open secondary market. High street investors by contrast are offered poorer terms by IFAs who don’t really understand the products and oversell the ‘capital guarantees’. Every once in a while though a really good high street structured product like the Dawnay Day Quantum product slips through the net and we’ll comment on it – otherwise if you want advise on IFA introduced structured products look to the excellent website maintained by Ian Lowes , up in Newcastle, at HYPERLINK "http://www.lowes.co.uk" www.lowes.co.uk which is full of incisive comment based on real knowledge and experience.