Woolwich is looking to open up the hedge fund market to a wider range of retail investors with a plan offering a minimum investment of £3,000.
The protected FTSE hedge plan from Barclays group subsidiary Woolwich Plan Managers claims to be the first retail product to be linked to the FTSE hedge index.
The index was founded in July and tracks the performance of a select group of hedge funds. Performance is accessed using a mixture of qualitative and quantitative analysis.
The plan offers a return of two-thirds of any rise in the index over five years and guarantees the full repayment of the initial capital. Maximum investment is £500,000. The closing date for investments is October 22.
The plan is designed for investors who are able to remain invested for the full five-year period. If the plan is sold before the end of the term, investors can lose up to 9 per cent of their original investment.
Woolwich Plan Managers is one of the market's leading providers of structured products and already offers capital growth plans and peak performance plans.
Product manager Colin Dickie says: “Hedge funds are considered risky by many investors but they actually provide a useful balance to portfolios made up of more frequently held investment such as equities and bonds.
“As well as the strength of the FTSE name underlying the index, investors have the peace of mind that whatever happens to the index, they get back 100 per cent of their investment, as well as two-thirds of any rise in the value of the FTSE hedge index over the period.”