In this Mariana Structured Products review, let’s look closer at the investments offered by the firm plus the risks that come with them. Is it worth investing in structured products?
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Who is Mariana?
Since its 2009 founding as a brokerage firm, Mariana has grown into a global financial solutions supplier headquartered in London that offers market strategy, research, real estate, structured products, and tax-efficient investments.
To further strengthen its services, Mariana has formed a strategic relationship with United First Partners, a special situations investment and advisory group.
Wealth management, corporate finance, debt and equity capital markets, and asset transfers are only some of the many services offered by United First.
What are Mariana Structured Products?
A Structured Product refers to an investment designed to provide a specific rate of return for a specified degree of risk. This is accomplished through the use of derivatives, so called because their performance is based on that of the selected underlying market rather than on direct market participation.
An investor and a financial institution enter into a Structured Investment Product when the investor agrees to lend the institution money for the life of the product in exchange for a guaranteed or variable rate of return. This potential gain is tied to the Underlying, which is most often a stock market index like the FTSE 100 or individual stock prices.
Similarly, the framework of Structured Deposits is very similar. Money is deposited with the bank rather than lent, and the product is carefully crafted to guarantee the return of at least the initial invested amount at the end of the product term.
The value that Structured Products may add to a diversified portfolio is widely acknowledged in the modern financial landscape, as they allow for low-cost exposure to many different asset classes and have a clearly defined target return. They could also offer sufficient downside protection.
UK Structured Products (Public Offers)
The Mariana Platform, currently called MarianaForAdvisers, is where you can get your hands on their Structured Products. James Brearley and Sons Ltd., the custodian, offers online investment opening as an additional service to their clients.
FTSE 100 Income Kick Out Plan V2
Investments in the FTSE 100 Index, which tracks the performance of the 100 largest publicly traded firms in the United Kingdom, can be made through the FTSE 100 Income Kick Out Plan V2.
Since Credit Agricole CIB is the structured product’s counterparty, it is responsible for backing the investment. They are the party liable for delivering on the product’s promises, such as potential payouts based on the performance of the underlying index and the set trigger levels.
This is how it functions: The maximum duration of the investment is eight years and two weeks. An annual return of 7.25% is possible, with a quarterly return of 1.8125%. In order to receive this return, the FTSE 100 Index’s closing price each quarter must be at or above a predetermined threshold known as the Income Trigger Level.
Furthermore, the plan has something called a Kick Out Trigger Level. If the FTSE 100 Index’s price hits 105% of its initial value or greater beginning in the second year and continuing quarterly, the plan may conclude early and you may get your potential returns. This is a kick out situation.
In addition, there is an Initial Capital Return Barrier in place, with the threshold set at 65% of the initial investment. Your initial investment may be at risk if the FTSE 100 Index falls significantly and the final level is below 65% of the starting value at the conclusion of the investment period.
The offering will commence on Sept. 29, 2023.
SE 150 ESG Leaders Green Bond Kick Out Plan
The FTSE Custom UK 150 ESG Leaders 5% Decrement Index is used as a benchmark for this initiative because it is representative of companies with excellent ESG (environmental, social, and governance) policies.
The plan’s counterparty is investment bank Natixis. The target returns are notable, and the term is up to seven years and one week. You can receive a tax-free annual return of 10% on your investment, for as long as the plan is in effect, provided certain conditions are followed.
Like the FTSE 100 plan, there’s also a kick out provision here. Early termination of the plan and potential returns may occur if the index level exceeds or reaches 100% of its initial value within the first year and subsequently annually.
The Initial Capital Return Barrier is set at 65% of the initial investment amount for extra security. This protects you in case the index level has dropped significantly by the end of the investment period. This clause functions similarly to the safeguards in the FTSE 100 plan.
This plan is expected to kick off on Sept. 8, 2023.
Goldman Sachs FTSE 100 Deposit Kick Out – Dual Option 1 and 2
Option 1 and Option 2 are two separate investment opportunities under the Goldman Sachs FTSE 100 Deposit Kick Out – Dual Option plan, both of which are pegged to the FTSE 100 Index.
Goldman Sachs International provides a sense of financial security as the counterparty in both scenarios. Both options offer a maximum investment duration of 6 six years and one week.
With the protection of the Initial Capital Return Barrier, your initial investment is safe with both Options 1 and 2. No matter what happens to the FTSE 100 Index between the time of purchase and the Maturity Date, your initial investment is always safe with this feature.
Option 2’s potential yield is somewhat greater than Option 1’s, at 6.80% each year of the Deposit Plan’s term, paid gross. Option 1 has a possible return of 6.30% during the same time frame. Also, the first option has a kick out trigger level of 95% beginning in year three, whereas the second option has 100%.
Both plans began on Aug. 18, 2023.
FTSE 100 Super Defensive Kick Out Plan
This Credit Agricole-backed investment option is tied to the FTSE 100 Index and starts Aug. 18.
The maximum time period for investing in this plan is seven years and two weeks. Potential return on investment of 8% per year over the duration of the plan may be interesting to investors. This return is gross and will only be realized if the Plan initiates a kick out event. Year 3 triggers 100%, Year 4 95%, Year 5 85%, Year 6 75%, and Year 7 65%.
In addition, on the Maturity Date of the Plan, the Initial Capital Return Barrier is set at 60% of the Start Level.
10:10 Plan – Options 1, 2 and 3
The 10:10 Plan provides three separate investment alternatives, all of which track the FTSE Custom 100 Synthetic 3.5% Fixed Dividend Index. Citigroup Global Markets Limited serves as the counterparty. To give investors a clear window of time to work with, the investment term might go up to 10 years and two weeks.
A 70% Initial Capital Return Barrier is established for all three choices (Option 1, Option 2, and Option 3). Regardless of what happens to the Underlying, on the maturity date, this provision will guarantee that you receive 70% of your original investment.
Option 1 gives an attractive 8.75% return for each year the Plan is in effect, while Option 2 offers an even more alluring 10% return for the same time period. The third option goes even further, with a potential annual return of 11.25%. Due to the variation in possible returns, investors can tailor their portfolios to their own risk tolerances and return expectations.
Additionally, the alternatives are distinguished by the kick out trigger levels. One potential strategy is shown in Option 1, whereby trigger levels change over time. The 100% trigger level in the second option is maintained during the duration of the contract. The third one, with a greater 105% trigger level, opens the door to a possible kick out scenario.
The plans are also set to commence on Aug. 18.
Bespoke and Tailored Structured Products
Mariana also offers bespoke structured products that has exposure in developed and emerging markets, commodities or individual stock portfolios, among other underlying.
You can talk to company to learn more about the specifics of these products.
Who can invest in Mariana structured products?
Mariana, with its performance-focused investment solutions, caters to various investors. You can only access their investment offerings through a financial adviser, so you’ll need to consult with one.
You’ll get a notification from the company upon maturity of the chosen investment product, which will then allow you to opt to reinvest your gains or cash them out.
Can I get investment updates?
At least once every six months, you’ll receive a statement updating you on the value of your investments and outlining any payments you’ve earned, such as interest or dividends. You can also send a request to Mariana to get access to the said data or view your investments online via the login details sent to your email after you opened an account.
Can I cancel my investment?
One your application has been submitted and accepted, you’ll be given a cancel notice that gives you 14 days to rescind your investment. Should you cancel your application following the start date, then there’s a chance that you might not get back what you originally invested.
What are the risks of investing in Marian Structured Products?
- Market Risk Impact on Potential Returns. The attainment of potential returns from a plan is generally contingent upon the closing level of the relevant index on specific dates pertinent to the plan’s structure. For instance, kick-out anniversary dates, early maturity dates, end dates, and annual income dates dictate the plan’s outcomes. Should the index close below the required threshold on all relevant dates, the plan or its options will not yield any returns.
- Market Risk Impact on Repayment of Capital-at-Risk Schemes. In Capital-at-Risk plans, the repayment of invested capital upon maturity hinges on the closing level of the relevant index. If the index falls below the necessary level on all kick-out anniversary dates, early maturity dates (if applicable), and the end date, the repayment of invested funds will depend on the index’s closing level on the end date. The nature of protection barriers varies across structured products, encompassing daily observed barriers that can be breached during the investment term, and end-of-term barriers that are inviolable during the investment term. The level and type of barrier hold sway over the risk associated with the repayment of invested funds on the end date.
- Protected Structured Product Plans. Certain structured product plans offer comprehensive protection against stock market risk upon the end date. Nevertheless, it remains vital to comprehend that even plans designed with complete protection from stock market risk still bear the risk emanating from the issuer and counterparty bank’s financial stability. The potential returns and repayment of invested capital at the end date are contingent upon the issuer and counterparty bank’s solvency. Insolvency or an inability to meet obligations may lead to investors receiving an amount less than their original investment.
- Issuer and Counterparty Bank Risk. The majority of structured products’ potential returns and repayment of invested capital rely heavily on the financial stability of the issuer and counterparty bank. Instances where the issuer and counterparty bank encounter insolvency or inability to fulfill obligations might lead to investors receiving an amount below their initial investment.
- Financial Services Compensation Scheme Protection. It is imperative to note that claiming under the Financial Services Compensation Scheme is usually not viable in cases of issuer and counterparty bank failure or stock market index decline associated with a plan.
- Structured Deposits. Structured deposit plans, anchored in deposits, typically enjoy full protection from stock market risk upon the end date. Moreover, these plans benefit from the safeguards offered by the Financial Services Compensation Scheme, provided that the bank or building society is a duly licensed UK deposit taker.
Mariana Structured Products Review Bottom Line
Returns on investment and principal for majority of structured products are often tied to the rise or fall of a stock market index. These results could go either way depending on the issuer’s and the counterparty bank’s financial health.
You should read the relevant plan brochure and supporting materials carefully to completely understand the features, dangers, and terms of the plan. Key Information Documents are important additional documents that you need to review thoroughly before making any investment decision related to a certain plan.
You should only invest in Mariana structured products if you fully understand and accept the risk of losing some or all of your money. Always target a well-balanced portfolio when considering structured products or any other investments.
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Adam is an internationally recognised author on financial matters with over 830million answer views on Quora, a widely sold book on Amazon, and a contributor on Forbes.
