UK-based Barclays Wealth has announced that its new tactical five-year offering, the target growth plan, which will be open between February 2, 2009 and March 27, 2009, will return 55% and repay investors’ original capital as long as the FTSE 100 does not fall, at any time during the term, below 50% of its starting level.
According to Barclays, this means the index can fall up to 50% from its starting level at any time without putting either the return or capital at risk.
If the index does fall below 50% during the investment term and, at maturity, is lower than its starting point, both capital and the 55% return will reduce on a 1:1 basis with the index.
Colin Dickie, director of Barclays Wealth, says: At a time when net interest on cash deposits is offering an increasingly reduced return, we believe investors will soon begin the process of assuming a little more risk, albeit in a controlled fashion, and put in place strategies to recover the substantial losses they made in 2008.
As Target Growth has such a large safety margin before capital and return is put at risk — the FTSE 100 would need to plunge to 1989 levels — this investment might feature highly in the implementation of such strategies, particularly given such an attractive, and tax efficient, return.
