Barclays Wealth is to introduce another kick-out product this week and would consider doing a S&P version of its wealth ‘trend’ fund in a bid to capitalise on investor cautiousness.
In June, Barclays launched two ‘trend’ funds that can automatically switch into cash when the strategy loses value.
The IFSL Barclays FTSE 100 trend fund works by adopting a defensive allocation to cash if the index falls by 2.5 per cent or more over a five business day rolling period.
The IFSL Barclays FTSE Protector 80 trend fund, meanwhile, allocates between the strategy and cash depending on market conditions. The fund is run with the overall goal of protecting 80 per cent of the highest ever NAV price.
Barclays Wealth director Richard Henry says: “There’s a case for doing these sorts of funds with the S&P, but we need to see how well the FTSE funds are received. It’s important to diversify out of the FTSE. ”
He says that there is demand now for more conservative products that protect investors wealth.
The provider is also to launch another kick-out product, the Barclays defined returns plan (AK0100), this week. Henry says: “The kick-out products are the most popular in the UK.”
The kick-out product will have a maximum six-year plan and can mature on any anniversary from the third year onwards, provided that the FTSE 100 Index closes at a level no more than 10 per cent below the plan’s initial level, returning the original capital investment in full.
If the final index level is more than 10 per cent below the initial index level, no gain will be achieved, but investors’ original capital should still be returned in full at maturity, provided that the Index is no more than 50 per cent below the initial index level.