Morgan Stanley is marketing investment notes linked to an agricultural index to U.S. investors. The notes reference the agricultural sub-index of Goldman Sachs' Commodity Index, which has been referenced in structured notes globally and in substantial volumes over the last two years. Morgan Stanley officials declined comment on the notes prior to the end of the marketing period, but structured investment market watchers in the U.S. said they are not aware of the agricultural sub-index being sold to U.S. retail investors previously.
The notes have not priced but provisional marketing material says investors are expected to receive between 123% and 128% participation in the index over the one-year term of the notes. There is no capital protection. Agriculture-linked investments attracted some buzz in Europe last year (DW, 1/27/06) and have been touted as a logical next step for investors already comfortable investing in commodities.