Barclays boosts range with Emerging Markets Optimiser

Barclays Wealth continues to broaden its protected investment proposition with the addition of a new style of investment offering dynamic exposure to emerging market performance.

The five-year Emerging Markets Optimiser, which opens in early February, is linked to the iShares MSCI Emerging Markets Index Fund, an exchange traded fund managed by Barclays Global Investors. This index fund gives broad emerging markets exposure, with BRIC economies specifically accounting for 45 per cent (as at 31 December 2007). There is also exposure to key developing markets such as South Korea, Taiwan and South Africa.

To deliver the return, the investment employs an innovative strategy which uses market volatility to determine a daily participation rate in the performance of the fund. When volatility of the fund is high, the participation level will fall, and when volatility is low, participation levels will increase.

At maturity clients will receive the full return from the index fund as well as their initial capital, which is 100 per cent protected regardless of the performance of the fund.*

Returns are subject to CGT unless the plan is held within an ISA or PEP, in which case they will be tax-free. The Optimiser closes on 4 April 2008. (The offer period for ISA and/or PEP transfers is 17 March.)

The minimum investment is £5,000.

Colin Dickie, director, Barclays Wealth, says: “Emerging markets are an increasingly important investment area and one where long term investors have seen very high returns up until the current market turmoil yet, despite understanding the need to diversify their investment risk, most remain wary of committing to an area they know little about. The Optimiser offers an attractive package, on the one hand capital repayment at maturity is protected, on the other, the investment return is delivered through an investment technique designed to deliver an attractive return.

“The Optimiser effectively does what investors would expect of their investment manager: to enhance returns when volatility is low and reduce exposure when volatility is high and investors’ appetite to risk is reduced.

“The investment style is a major departure from our tradition core offering and with success we would hope to develop this particular genre of pay-off – in equally exciting investment areas - over the coming months.”