Barclays Wealth has claimed that the five-year Emerging Markets Optimizer, which opens in early February 2008, is linked to the iShares MSCI Emerging Markets Index Fund, an exchange traded fund managed by Barclays Global Investors. This index fund gives broad emerging markets exposure, with BRIC economies specifically accounting for 45%. There is also exposure to key developing markets such as South Korea, Taiwan and South Africa.
To deliver the return, the investment employs an innovative strategy which uses market volatility to determine a daily participation rate in the performance of the fund. When volatility of the fund is high, the participation level will fall, and when volatility is low, participation levels will increase.
At maturity clients will receive the full return from the index fund as well as their initial capital, which is 100% protected regardless of the performance of the fund. The minimum investment is GBP5,000. IFA commission is 3%.
Colin Dickie, director of Barclays Wealth, said: Emerging markets are an increasingly important investment area and one where long term investors have seen very high returns up until the current market turmoil yet, despite understanding the need to diversify their investment risk, most remain wary of committing to an area they know little about.
