Cube

Terms & Conditions

Important Notice

This website is maintained by CET Capital Limited which is a limited company registered in England. Its registered offices are at 55 Bryanston Street, London, W1H 7LZ. CET is authorised and regulated by the Financial Conduct Authority no. 446267.

This website is provided for your general information only and does not constitute investment advice or an offer to sell or the solicitation of an offer to buy any investment.

Nothing on this website is advice on the merits of any product or investment, nothing constitutes investment, legal, tax or any other advice nor is it to be relied on in making an investment decision. Prospective investors should obtain independent investment advice and inform themselves as to applicable legal requirements, exchange control regulations and taxes in their jurisdiction.

This website shall not constitute an underwriting commitment, an offer of financing, an offer to sell, or the solicitation of an offer to buy any securities described herein, which shall be subject to CET internal approvals. No transaction or service related thereto is contemplated without CET subsequent formal agreement.

This website contains indicative summaries of the terms and conditions of the securities/transactions described herein and may be amended, superseded or replaced by subsequent summaries. The final terms and conditions of the transaction and any related security will be set out in full in the applicable transaction confirmation, offering document(s), pricing supplement or binding transaction document(s).

CET does not guarantee the accuracy or completeness of information which is contained in this website and which is stated to have been obtained from or is based upon trade and statistical services or other third party sources. Any data on past performance, modelling, scenario analysis or back-testing contained herein is no indication as to future performance. No representation is made as to the reasonableness of the assumptions made within or the accuracy or completeness of any modelling, scenario analysis or back-testing. All opinions and estimates are given as of the date hereof and are subject to change. The value of any investment may fluctuate as a result of market changes. The information in this website is not intended to predict actual results and no assurances are given with respect thereto.

This website complies with the regulatory requirements of the United Kingdom. There may be laws in your country of nationality or residence or in the country from which you access this website which restrict the extent to which the website may be made available to you.

Parts of this website are being made available in the UK to persons who are investment professionals as defined in Article 19 of the FSMA 2000 {Financial Promotion Order) 2005. Any investments to which the contents of these parts relates to will be entered into only with such persons. Clients should contract and execute transactions through a broker in their home jurisdiction unless local regulations permit otherwise. The materials contained in these parts of website are not for distribution to retail customers.

CET does not provide, and has not provided, any investment advice or recommendation to you in relation to the transaction and/or any related securities described herein. You may not rely on any communication (written or oral) from CET as investment advice or as a recommendation to enter into any transaction. Accordingly CET is under no obligation to, and shall not, determine the suitability for you of the transaction described herein. You must determine, on your own behalf or through independent professional advice, the merits, terms and conditions and risks of the transaction described herein. You must also satisfy yourself that you are capable of assuming, and assume, the risks of any such transaction. CET accepts no liability whatsoever for any losses arising from the use of this website or its content or reliance on the information contained herein, even if CET knew of the possibility of those losses.

Retail Investors

Structured products are “complex instruments” this means that they will only be appropriate for you if you have sufficient knowledge and experience. In order to access the site you need to be able to agree to all of the following statements

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than ***. This includes any Prospectus. *** is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, *** shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes any warranty as to the accuracy of any information or content on the website. The description of any ETP Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on the website and should be read prior to making any investment.

Risk Warnings

You should always bear in mind that;

  • You already hold other retail investments like funds, investment trusts or structured products
  • You would consider yourself to be a knowledgeable and informed investor
  • You understand the way that the investment return, the maturity value and any income are calculated by reference to the performance of underlying assets
  • You realize that you are not investing in the underlying assets but instead into a products whose performance is linked to these assets
  • You are prepared to invest into products where your capital is at risk
  • You have sufficient financial resources to be able to accept a loss on investments you make
  • You understand that the investment return and any coupon that you receive from structured products will depend on the performance of the underlying assets, and so you may not receive any investment return or income
  • The return of the capital may also be linked to the performance of the underlying assets. You understand how this is calculated, and appreciate that the amount that you receive back when a product matures may be less than you paid for it
  • The defined value of each product will only be realised if the product is held to the maturity date. You understand that if you sell a product before the maturity date you will not get the defined value, and the amount that you receive may be less than the amount that you invested.
  • You understand that if the issuer is unable to meet their obligations to pay the amount due when the product matures, that you will not receive the defined value and will loose some or all of the money you have invested
  • You understand that there are charges built into structured products.
  • You understand the personal tax implications associated with investing in structured products

United States Persons

The information provided on this site is not directed to any United States person or any person in the United States, any state thereof, or any of its territories or possessions.

Persons accessing this website in the European Economic Area.

Exclusion of Liability

Certain documents made available on the website have been prepared and issued by persons other than CET Capital Limited. This includes any Prospectus. CET Capital Limited is not responsible in any way for the content of any such document. Except in those cases, the information on the website has been given in good faith and every effort has been made to ensure its accuracy. Nevertheless, CET Capital Limited shall not be responsible for loss occasioned as a result of reliance placed on any part of the website and it makes any warranty as to the accuracy of any information or content on the website. The description of any Security referred to in this website is a general one. The terms and conditions applicable to investors will be set out in the Prospectus, available on request and should be read prior to making any investment.

Risk Warnings

Investments of the type described therein may involve a high degree of risk, and the value of such instruments may be highly volatile. Such risks may include, without limitation, risk of adverse or unanticipated market developments, risk of counterparty or issuer default and risk of liquidity. Accordingly you must independently determine, with your own advisors, the appropriateness for you of the securities/transaction before investing or transacting. You should always bear in mind that;

  • The investment performance of any security referred to on this website can be volatile and can go up or down and you can lose your entire investment.
  • Past performance is not an indication of future performance.
  • Rates of exchange may affect the value of investments.
  • Applications to invest in securities referred to on this website must only be made on the basis of the relevant Prospectus.

Cookies

CET Capital Limited may collect data about your computer, including, where available, your IP address, operating system and browser type, for system administration and other similar purposes. These are statistical data about users' browsing actions and patterns, and they do not identify any individual user of the website. This is achieved by the use of cookies. A cookie is a small file of letters and numbers that is put on your computer if you agree to accept it. By clicking 'I agree' below you are consenting to the use of cookies as described here. These cookies allow you to be distinguished from other users of the website, which helps CET Capital Limited provide you with a better experience when you browse the website and also allows the website to be improved from time to time. Please note that you can adjust your browser settings to delete or block cookies, but you may not be able to access parts of our website without them.

In the event that you on-sell any investment described herein, you agree to disclose, to the full extent required by any regulations applicable to such sale, any fees or inducements received by you from CET in connection with such investment. CET, its affiliates and the individuals associated therewith may (in various capacities) have positions or deal in transactions or securities (or related derivatives) identical or similar to those described herein.

NO ACTION HAS BEEN TAKEN OR WILL BE TAKEN THAT WOULD PERMIT A PUBLIC OFFERING OF THE SECURITIES DESCRIBED HEREIN IN ANY JURISDICTION IN WHICH ACTION FOR THAT PURPOSE IS REQUIRED. NO OFFERS, SALES, RESALES OR DELIVERY OF THE SECURITIES DESCRIBED HEREIN OR DISTRIBUTION OF ANY OFFERING MATERIAL RELATING TO SUCH SECURITIES MAY BE MADE IN OR FROM ANY JURISDICTION EXCEPT IN CIRCUMSTANCES WHICH WILL RESULT IN COMPLIANCE WITH ANY APPLICABLE LAWS AND REGULATIONS AND WHICH WILL NOT IMPOSE ANY OBLIGATION ON CET OR ANY OF ITS AFFILIATES. THIS WEBSITE DOES NOT DISCLOSE ALL THE RISKS AND OTHER SIGNIFICANT ISSUES RELATED TO AN INVESTMENT IN THE SECURITIES/TRANSACTION. PRIOR TO TRANSACTING, POTENTIAL INVESTORS SHOULD ENSURE THAT THEY FULLY UNDERSTAND THE TERMS OF THE SECURITIES/TRANSACTION AND ANY APPLICABLE RISKS. THIS WEBSITE IS NOT A PROSPECTUS FOR ANY SECURITIES DESCRIBED HEREIN. INVESTORS SHOULD ONLY SUBSCRIBE FOR ANY TRANSFERABLE SECURITIES DESCRIBED HEREIN ON THE BASIS OF INFORMATION IN THE RELEVANT PROSPECTUS (WHICH HAS BEEN OR WILL BE PUBLISHED AND MAY BE OBTAINED FROM CET), AND NOT ON THE BASIS OF ANY INFORMATION PROVIDED HEREIN.

CET Investing is a trading division of CET Capital Ltd, Registered in England No. 04986900. CET Capital Ltd is regulated by the Financial Conduct Authority No. 446267. This website is confidential, and no part of it may be reproduced, distributed or transmitted without the prior written permission of CET.

(1) I HAVE READ UNDERSTOOD AND ACCEPT THIS DISCLAIMER AND

(2) I CONFIRM THAT I AM NOT A RESIDENT OF THE UNITED STATES AND UNDERSTAND (A) THAT THE INFORMATION THAT FOLLOWS IS ONLY BEING OFFERED TO AND IS ONLY INTENDED TO BE AVAILABLE TO PERSONS WHO ARE NOT RESIDENTS OF THE UNITED STATES AND (B) THAT CET AND ITS AFFILIATES WILL RELY ON THE ACCURACY OF THIS INFORMATION

Please read and agree to the following statements

Structured products are “complex instruments” this means that they will only be appropriate for you if you have sufficient knowledge and experience. In order to access the site you need to be able to agree to all of the following statements

  • I already hold other retail investments like funds, investment trusts or structured products
  • I consider myself to be a knowledgeable and informed investor
  • I understand the way that the investment return, the maturity value and any income are calculated by reference to the performance of underlying assets
  • I realize that I am not investing in the underlying assets but instead into a products whose performance is linked to these assets
  • I am prepared to invest into products where my capital is at risk
  • I have sufficient financial resources to be able to accept a loss on investments I make
  • I understand that the investment return and any coupon that I receive from structured products will depend on the performance of the underlying assets, and so I may not receive any investment return or income
  • The return of the capital may also be linked to the performance of the underlying assets.
  • I understand how this is calculated, and appreciate that the amount that you receive back when a product matures may be less than I paid for it
  • The defined value of each product will only be realised if the product is held to the maturity date. I understand that if I sell a product before the maturity date I will not get the defined value, and the amount that I receive may be less than the amount that I invested.
  • I understand that if the issuer is unable to meet their obligations to pay the amount due when the product matures, that I will not receive the defined value and will lose some or all of the money I have invested
  • I understand that there are charges built into structured products.
Individual Investor »
Professional Investor »
« Back
Agree »

Research & Analysis

Introduction to CubeMay 19, 2014 - 10:00

Introduction to Cube

Cube Investing is a new provider in the UK structured product market. We see ourselves as a provider of structured investments. We are not a Plan Manager or Structured Product provider. Instead we are looking to create attractive investments. We are working with a number of banks to create and distribute new investments that will be bought and held by investors via wraps, platforms and brokerage accounts, in the same way that they buy and hold Exchange Traded Funds (ETF’s).

Cube Product

All investors are looking for attractive investments to hold as part of their portfolio. These may be one-off investments that work on a stand-alone basis or assets that will be used as part of a model portfolio to give exposure to a particular market. In either case, what we aim to do is to work with the issuing banks to develop new products that offer an attractive mix of risk and return.

Structured products have received a lot of bad publicity, and have been under close inspection by the regulator. The main focus of the regulator’s attention has been structured products distributed by the high-street banks through their own advisers. Structured products distributed through advisers, and those used by discretionary managers, have in fact performed very well. The reality is that all structured products that have matured over the last 5 years have delivered exactly what they promised, and many have offered a better return than the underlying market. Looking forward, we think that structured investments can be created that offer a very appealing mix of risk and return for investors.

The second leg of our strategy is to offer investments that offer exposure to an asset class. We will design these investments to be used by investment managers as part of a model portfolio. They will give exposure to major assets like UK or US equity, commodities, bonds and alternatives, and can be developed to offer additional protection, or extra income. We aim to use our own product development skills, along with the expertise of the banks that we work with, to create attractive solutions for investors.

Cube Research

Investors and advisers need to understand what risks they face when they buy an investment, and what returns they may receive. Up to now, this sort of clear information has been missing from structured investments. As a result, investors have not been able to see what structured investments offer and advisers have naturally been reluctant to recommend structured investments because they cannot easily justify their selection.

All of our investments will come with a Cube Risk score. First, we calculate the volatility of the distribution of annualised returns that an investor may receive based on our stress test. We can then use this volatility value to place the product on the SRRI (Synthetic Risk and Return Indicator) 1 to 7 risk scale that is mandatory for all funds, or on the popular 1 to 10 scale used by many advisers. The Cube Risk score is updated every week for every product before and after the strike date, allowing investors to keep on top of the investments that they own.

Volatility

Cube Risk
1 to 10
0% 10% 20% 30% 40%

We also calculate the expected return from our stress test. This is the average compounded annual growth rate. The Cube Return score allows an investor to compare the returns that they may receive from our investment with the returns that they may get from other assets.

An accurate, reliable and transparent measure of the risk and return that an investor can expect is, in our view, key to getting investors to appreciate the appeal of structured investments. Unless investors know and understand the sort of return that an investment offers, and the risks that they face, they cannot realistically be expected to make informed investment decisions. Similarly, advisers cannot really justify a product recommendation without the same information. They need to know that a product is appropriate for the investor’s attitude to risk and their capacity for loss. Without this quantitative analysis, an adviser is going to struggle to justify any recommendation they make. On the other hand, armed with this information, advisers can make recommendations with more confidence knowing that they have selected the most appropriate investment for the investor, and with the audit trail for their file that documents the selection process.

Cube Research will be available on all retail structured products, so allowing investors to compare one product with another, and to select the most appropriate product for each investor. We will offer our product list with Cube Risk and Return scores, and product selection tool for free for a limited introductory period. The research will continue to be free for advisers that invest on Cube products. Product promoters can also pay to make our analysis of their products freely available to advisers. We are also working with a number of wraps, brokers and platforms to make our analysis freely available to their clients.

Investments Designed for wraps and platforms

According to Platforum:

  • Platform assets were £265bn by Q3 2013
  • £11.58bn of new business was written on platforms in Q4 2013
  • 34% of Q4 gross sales (£17.5bn) went into model portfolios
  • Structured investments account for just 0.07% of Q4 investment sales on platforms

It is no surprise to us that there is virtually no investment into structured investments through wraps. The buying and selling process is not easy, the plan manager can impose limitations on liquidity, the value of the investment may not show in the investor’s portfolio, and there are layers of unnecessary costs.

Cube is the first independent structured investment provider to develop investments specifically for this market. Our view is that by creating investments for this channel, we can attract significant volumes. Our investments will be bought and sold by wraps in exactly the same way that they buy and sell ETF’s.

No application forms

There is no application form for any of our investments, investors simply instruct their broker or wrap to purchase the investment for them. There is no requirement to attach a cheque to the application form, and no requirement for Know Your Client (KYC) or Anti-Money Laundering (AML) checks. The investor and their adviser will get an immediate confirmation that they have invested, so they don’t need to wait to see if they own the investment.

Part of the portfolio

The investment is held alongside all of the other funds and assets that they hold. The investment has a daily price, and will be valued every day as part of their portfolio. There is no need for the investor or adviser to have to consolidate off-wrap assets with the main part of their portfolio held on a wrap. If the adviser is charging an annual fee based on the clients portfolio value, our investments will automatically be included in the portfolio.

Less administration

The reduced administration burden eliminates a major impediment for a lot of investors and advisers. In the post-RDR world, as commissions have disappeared many advisers were struggling to justify the time and effort required to invest into off-platform structured plans.

Easy dealing

Most of the investments we offer will have a 6-week trading period before the strike is set. This will give investors a chance to buy the product at “par” and know that the terms are fixed. After the strike date, some of the issuers that we work with will continue to allow investors to buy in the secondary market and so take advantage of market opportunities that arise. All of the investments will have a price at which investors can sell their holding every day, providing that markets are functioning normally.

Lower costs, so better terms

Structured plans include brokerage, dealing and administration charges within the product. Because these fees are built into the investment, it has the effect of reducing the terms on offer to the investor. Because our investments are bought through a wrap, platform or brokerage, there is no requirement for the “plan wrapper”. Eliminating the plan wrapper means eliminating the costs associated with the plan. The consequence is that the terms we are able to offer investors improve.

To put this in context, when plan management, administration and brokerage fees are disclosed they are typically between 0.5% and 1%. This is value that we are able to keep in the product to benefit investors.


« Back