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Barclays Wealth sees shift away from FTSE linked structured products

Barclays Wealth is seeing increased investor appetite for structured products linked to indices other than the FTSE 100.

Manager Lisa Chaudhuri acknowledges the structured product continues to be largely FTSE-centric but says the group is receiving more requests from advisers for different underlying indices.

She says: “What we’re trying to do now is offer both a FTSE linked product and something linked to another market. I think there is appetite to move away from the FTSE. You’ve got concentration risk if you’ve got your whole portfolio based on the FTSE 100.”

In July, Barclays is due to launch its super tracker series which comprises three year and five year FTSE-linked plans offering 3x gearing with returns capped at 45 per cent and 90 per cent as well as a five-year S&P 500 linked plan capped at 80 per cent all with 50 per cent soft capital protection.

This joins its five year light energy commodity plan and the emerging markets optimiser plan which is already halfway through its selling period.

The latter plan offers exposure to the iShares MSCI emerging market index fund and uses a risk-adjusted mechanism to protect investors from high volatility in the market.

Chaudhuri says: “Because emerging markets have been typically very expensive to get exposure using derivatives we use the optimiser strategy which gives exposure based on realised volatility and not implied volatility. This is how options are normally priced so you’re paying for what is happening in the market, not what we expect to happen.”

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