Barclays launches two new FTSE 100 linked Investment Notes

Barclays Stockbrokers today announces the launch of two new Investment Notes focusing on the FTSE 100 index. Volatile market conditions are prone to producing polarized positions. While some investors prioritise capital protection because they are nervous about the continued falls, the more adventurous investors can see these markets as offering significant opportunities for growth over the longer term. Research from Barclays Stockbrokers found nearly half of investors (48%) believe the FTSE will start to recover in six months. Investors also continue to view the FTSE as a buying opportunity: on Monday 2 March, as markets plummeted, 74% of trades on Barclays Stockbrokers were buys compared to 26% sells.

The first Note launched is the FTSE 100 Protected Defined Returns Investment Note: a five year Note offering full capital repayment. The Note offers a fixed return of 32% provided that at maturity the final level of the FTSE 100 is no lower than the Initial Index Level. If the FTSE 100 Index has fallen, investors will not receive an investment return but their capital will be repaid in full.

The FTSE 100 Accelerated Returns Investment Note Issue 3 offers investors the chance to capitalise on growth in the FTSE 100 over the next five years. It offers investors the opportunity to significantly enhance their returns, offering five times any rise in the FTSE 100 up to a maximum return of 100%. Therefore the index only needs to rise by 20% at maturity to provide a return of 100%. Investors will get their capital repaid in full at maturity provided that the FTSE 100 has not fallen by more than 50% over the term of the Note. If this has occurred and the index is below the Initial Index Level, then investors will receive a reduction of 1% for every 1% that the index is below its starting level.

Both of these notes can be sold early, but you may get back less then you invested

Both Investment Notes are eligible to be held within a Barclays Stockbrokers Investment ISA or SIPP and therefore investors can also enjoy tax-free returns on their investments, with the opportunity to invest from as little as £500.

Barbara-Ann King, Head of Investment Strategy and Marketing at Barclays Stockbrokers says: “We have noted a significant increase in the number of people seeking to transfer cash investments, which we suspect is due to the low returns offered by cash this year. By issuing two Investment Notes with two different risk profiles, we believe we are catering for the two very different target audiences – those seeking to protect capital and potentially receive a return over cash, and our traditional customer base, who are prepared to take a higher level of risk to their capital in return for potentially enhanced returns.

“We have chosen to focus on the FTSE 100 because while the index has experienced extreme market volatility in recent months, investors remain confident that not only is now an opportunity to buy but that the FTSE will start to recover this year and has the potential to produce positive returns.

“The FTSE 100 Protected Defined Returns Investment Note will suit those investors who are prepared to put their return at risk in order to receive potentially better rates than those available from cash, and want the peace of mind that capital protection offers, while the FTSE 100 Accelerated Returns Investment Note Issue 3 offers investors the chance to take advantage of some of any recovery in the FTSE 100 by receiving enhanced returns. This year’s ISA season is now upon us and both these notes are eligible to be held within an Investment ISA and SIPP.”