Barclays Wealth relaunches Defined Returns Plan

Barclays Wealth has split its Defined Returns Plan into two distinct investments and introduced a four-year capital protected option as part of its drive to enhance clarity and product choice in the IFA market.

The Defined Returns Plan, which previously offered three investment choices in one package - two with full capital protection plus an annual kick-out option with more limited protection - have been divided into two separate products to reflect their risk profiles.

DRP Capital Protection will launch on 3 June with three options delivering a fixed return of either:

20 per cent - three-year option (up from 18.75 per cent)
30 per cent - four-year option (new)
40 per cent - five-year option (unchanged)

All three products offer full capital protection and will deliver their return provided the FTSE 100 at maturity is equal to or higher than its level at the starting date.

The second product - DRP Annual Kick-Out - launched on 17 May offering investors a 10 per cent return for each year the plan is in force. If the index matches or exceeds its starting level on any of the plan's annual anniversaries, it will automatically mature and deliver the accumulated return.

In the event of the FTSE 100 being lower at maturity than it was at the starting date, investors will receive back all of their original investment unless the index falls by 50 per cent and is not equal to or higher then its initial level maturity, in which case capital is lost 1:1 with the index.

Barclays Bank PLC issued notes support both products. Barclays Bank PLC's capacity to meet its financial commitments is deemed very strong. This is supported by a number of independent assessments from leading credit rating agencies such as Standard & Poor's, where the rating is ‘AA ‘, which has remained unchanged since 1994.

Colin Dickie, director, Barclays Wealth, says: "The DRP has been one of our most popular investments but we felt we could improve clarity by splitting it into two distinct products, one with full capital protection and one with more limited protection. We believe this simplification will make advisers' lives easier, which is also the rationale for introducing the new four-year term which was designed to help advisers cater for clients with different investment horizons."