Barclays Stockbrokers launches US Supertracker

All eyes will be on the US this month as Barack Obama is inaugurated and following the rapid decline of the US economy in 2008, the US market is predicted to begin its recovery this year. Barclays Wealth research predicts growth in US equity prices of over 15% in 2009 and a further 9.3% in 2010, as the economic recovery kicks off in the second half of the year. In response to this predicted growth, Barclays Stockbrokers has launched the US Top 500 Supertracker Investment Note

The Note which is linked to the market value of the S&P 500 Index, aimed at investors looking to capitalise on predicted US growth, has a three year term and offers 2 times the rise of the index up to 25%. Therefore the final index level only needs to have risen by 25% at the end of the 3 years for an investor to receive the maximum 50% return. Capital is repaid in full at maturity provided that the S&P 500 Index has not fallen to less than 60% of the initial index level at any time during the term. If it has and, at maturity, it is lower than the initial index level capital will be reduced by 1% for every 1% the Index is below its initial level.

Therefore, if £20,000 is invested and the final index level has risen by at least 25% the investor would receive a return of £10,000 on top of the repayment of the initial capital investment.

The US Top 500 Supertracker Investment Note is available exclusively from Barclays Stockbrokers until 26 January 2009, with the opportunity to invest from as little as £500.

Barbara-Ann King, Head of Proposition at Barclays Stockbrokers says: "As the US economy looks poised to start the road to recovery, many of our clients will be looking to take advantage of that growth over the coming years. Investing through this note is one way to do this over the medium term while benefiting from capital protection at certain levels. We expect this product to also be popular as a means for investors who are prepared to accept some risk to their capital to diversify their portfolios into an important and growing major economic market"

"Due to its 3 year term it is not an eligible investment for an ISA, but, for those seeking tax efficiency, if the US Top 500 Supertracker Investment Note is held in a SIPP, any return received will be free of tax."

Michael Dicks, Head of Research and Investment Strategy, Barclays Wealth comments on the outlook for the US market: "The US economy is poised to contract in Q1 and possibly Q2, but lower inflation - via the boost it will provide to households' purchasing power - and additional fiscal support, should help steer the economy through recession in 2009.

"Equities are unlikely to avoid the volatility of macro data and risk aversion in the first part of 2009, but the firming of the recovery and consequent improvement in the profit outlook suggest significant upside in the S&P 500. In fact, given equity markets' leading properties, it is not unreasonable to expect a sustained pick-up in the S&P 500 early in Q2"