Barclays Stockbrokers launches US Supertracker Note

While investors are keen to take advantage of any upturn in the US economy, many remain nervous about further market fluctuations. In response to this, Barclays Stockbrokers has launched the US Supertracker Issue 2. This structured product offers investors the chance to gain from a multiple of the growth in the S&P 500 and is available exclusively until 27 July 2009, with the opportunity of investing from as little as £500. The Note can be held in an ISA or SIPP to protect any returns from tax.

The S&P 500 index covers approximately 75% of the US equities market and is one of the most commonly used benchmarks for the overall US stock market. The US Supertracker Issue 2 offers a return of four times the rise in the S&P 500, limited to a maximum return of 90%. That means that the index only needs to have risen by 22.5% from its initial level to the Final Index Level, which is averaged over the last month of the term, for investors to receive the 90% maximum return on the original investment.

The Note also offers the repayment of 100% of an investor's capital at maturity, provided that the S&P 500 Index has not reached a level less than 50% of the Initial Index Level at any time during the term with the Final Index Level below its starting level. If it has reached a level lower than 50% of the Initial Index Level at anytime during the term and the Final Index Level is below the Initial Index Level the capital repayment will be reduced by 1% for every 1% that the Final Index Level is below the Initial Index Level.

Barbara-Ann King, Head of Investments at Barclays Stockbrokers, comments: "The US is the largest and arguably the most important developed geographical market - especially in light of the widely-held view that it will lead the recovery from recession. Stock markets performed much better than expected in the second quarter of 2009 so global fears of a deep and prolonged depression have been largely alleviated over the past few months. Also the effects of Obama's fiscal stimulus package are expected to become tangible during the second half of the year.

"Many forecast that US economic data will show recovery underway by Q4 2009, and those with more bullish views see the uplift in the S&P 500 over the last 10 days on the back of improved Q2 corporate results as being the beginning of this process. By investing in the US at this time, investors can take advantage of expected upturns in the US economy and can use this investment to diversify their portfolios through exposure to the US.

"The latest outlook from Barclays Wealth reveals that moreover relative returns in the euro-area, Japanese and UK markets vis-à-vis the US ultimately depend on macroeconomic fundamentals - such as relative US$ economic profits, relative inflation-adjusted interest rates and relative GDP volatility. Given these, in the long-term, the US market looks more attractive than either Europe or Japan (especially the latter). So, investors may reap higher rewards by investing in the US than in the other major developed markets, which seem relatively expensive."