Barclays Wealth adds new investment option to AKO 100

Barclays Wealth is reissuing its popular five-year Defined Returns Plan Annual Kick-Out with a new investment option to enable advisers to cater to different risk/reward appetites.

Launching on 3 February, AKO 100 - the new name for the original DRP AKO - will automatically mature and deliver its return on the first annual anniversary where the FTSE 100 is either at the same level or higher than its starting point. If this occurs on the first anniversary, investors will receive a return of 12%; if it occurs on the second anniversary, investors receive 24%, and so on up to a maximum return of 60% in year five.

For investors who want to increase the likelihood of an early return, Barclays Wealth is launching a new option - AKO 80 - which will deliver its return on the first anniversary where the FTSE 100 exceeds 80 per cent of its starting level. In exchange for this lower threshold, investors will receive a 7 per cent return multiplied by the number of years the investment is in force, up to a maximum return of 35% in year five.

Investors can select either option as a standalone investment or weight their exposure across both options, according to their individual appetite for risk and reward.

If either investment option does not automatically mature, investors will receive full money back unless the FTSE 100 is lower at maturity than at the starting date, and at some point during the investment period had fallen by 50 per cent or more from its initial level. In this event, capital is lost 1:1 with the index.

Potential returns are treated as capital gains. Full details of both options can be found at barclaysinvestors.com/ifa

Colin Dickie, director, Barclays Wealth, says: "Our original AKO - now the AKO 100 - has long been our most popular investment but we believe that investors will appreciate having an additional option to improve the likelihood of a successful outcome, albeit at a lower headline rate.

"We think both options will appeal to investors seeking attractive returns at a time when cash on deposit is, in most cases, only offering a negative real return. The additional risk investors have to take to gain that extra return should be set against the fact that these options have a large safety margin before capital becomes at risk. Investors can mix and match the options to suit their appetite for risk and reward."