Barclays Wealth has announced that it is reissuing its five-year Defined Returns Plan Annual Kick-Out, or DRP AKO, with a new investment option.
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, said Barclays Wealth. 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 said that it is launching a new option, AKO 80, which will deliver its return on the first anniversary where the FTSE 100 exceeds 80% of its starting level. In exchange for this lower threshold, investors will receive a 7% return multiplied by the number of years the investment is in force, up to a maximum return of 35% in year five.
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% or more from its initial level, added Barclays Wealth.
Colin Dickie, director at Barclays Wealth, said: 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.
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.
