Barclays Stockbrokers has launched two FTSE 100 structured products.
The firm says the recent rally in global stock markets has been significant, but investor opinion is divided as to what the future holds for the market over the medium term. While some investors are confident of growth opportunities, more cautious investors may be deterred by the prospect of a market correction or general stock market volatility.
The two products aim to accommodate the sentiment of these different investors. They are available exclusively until 28 October 2009.
The Protected FTSE 100 Note is designed for cautious investors who want access to the returns traditionally generated by the equity markets but also value the security of knowing that their capital will be repaid in full at maturity. It has a five year term and offers a return of two times the rise in the FTSE 100, limited to a maximum return of 45 per cent. This means a rise of 22.5 per cent from the initial index level to the Final Index Level (which is averaged over the last year of the term) would provide investors with the 45 per cent maximum return on their investment. As the return is capped at 45 per cent if the index increases above 22.5 per cent investors will not see an incremental rise in their return.
The FTSE 100 Accelerated Returns Investment Note Issue 4 has been designed for investors who want to receive enhanced returns from the FTSE100, perhaps to make up for not having benefited from the market rally to date. It offers investors three times any rise in the FTSE 100 Index over the five year term, up to a maximum return of 75 per cent. The Final Index Level (subject to averaging over the last 12 months) would need to have risen by 25 per cent at maturity for the maximum return to be paid.
If an investor opts to sell the investment during the term rather than hold it to maturity they will receive the market price which may be more or less than they originally invested.
Barbara-Ann King (pictured), head of investments at Barclays Stockbrokers, says: "Investor sentiment has remained polarised following significant rallies in the FTSE 100. While some believe we are now in a bull market, and are seeking to benefit from this, others are more cautious. Either fearing a market correction and wanting to be protected from this, or they need the certainty that their capital will be repaid when investing in equity markets. Our two new structured products cater for both these very different targets.”
Both structured products are eligible to be held within a Barclays Stockbrokers Sipp or investment Isa.