Barclays Wealth AKO kicks-out early

The early exit feature of Barclays Wealth's Defined Returns Plan Annual Kick-Out (AKO) has been activated, delivering its return of 11% for its AKO 100 option and 6.25% for its AKO 80 option after just one year.

The DRP AKO 80, which was launched in April 2009, required the FTSE 100 to be at 80% of its strike rate of 4345.93 in order to deliver its stated return on its first anniversary; and the AKO 100 needed the FTSE to be at the same level as its strike rate to automatically kick out. When the Index closed above this strike level on 21st June, the values of both options were realised and they delivered their stated returns to investors.

Meanwhile, the June AKO is still available for new business with two options. The AKO 100's value will be realised on any anniversary - from the first onwards - where the FTSE 100 is at or above its starting level and will return 10% for every year the investment has been in force. The second option, the AKO 80, will deliver its stated return on any anniversary - from the second onwards - where the FTSE is at or above 80% of its starting level and will return 7.5% for every year the investment is in force. Capital repayment will be reduced if the index closes below 50% of its starting level at anytime during the term and is below the starting level at maturity. These Plans could be sold before a kick-out or maturity but for market value, which may be less than the amount invested, irrespective of the Index's performance.

Lisa Chaudhuri, vice president, Barclays Wealth, says: "This is an example of how useful Kick-Out products are to a portfolio as they offer a clearly defined conditional return over a specific period of time. It would have been possible for investors to have received a higher return by investing directly in the underlying index had they timed their investment perfectly, but our Kick-Outs help to mitigate the issue of market timing and also offer repayment of capital subject to certain conditions , which is still proving to be an important feature to an investors' portfolio. And as the markets continue to be volatile, a return of 11% after just one year should be a pleasing return for these investors."