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Barclays boosts investor exposure to China

Barclays Stockbrokers has launched a new investment note to give investors access to Chinese equities and agricultural commodities.

The five year growth investment is linked to the performance of a basket of equities and commodities and is designed to provide 125 per cent of any rise in the basket.

Forty per cent of the basket is weighted on FTSE Xinhua China 25 index with a 30 per cent weighting on both the S&P GSCI agriculture excess return index and S&P GSCI livestock excess return index.

Investors can choose to receive the capital protection offered by holding the note until maturity or can sell the note beforehand realise shorter term gains. However by choosing the latter option an investor may get back less than they invested.

Minimum investment is £500 and the product is available through a Barclays MarketMaster, investment Isa and Sipp account.

Henk Potts, equity strategist at Barclays Stockbrokers, says: “China remains one of the world’s most interesting long-term growth stories, but the short-term macro risk is currently larger than usual. Despite this we still see China as one of the best long-term growth stories in the world.

“In agricultural commodities, there are tight supply/demand balances and market dynamics, with low customer inventories. In terms of commodities we remain positive on price prospects on the back of lower and delayed 2008 US corn plantings, strong Chinese demand, expanding US ethanol output, rallying crude oil prices and low inventories. All of which leads us to believe that prices will rise.”

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