Barclays Capital announces its intention to launch its first FTSE 100 linked structured fund
Barclays Capital Fund Solutions, the asset management business of Barclays Capital, is broadening its offering in the structured funds market with the first in a series of products designed to increase the appeal and availability of structured investments among advisers and their retail and other clients.
Available through a range of channels, including an arrangement with Cofunds, the IFSL Barclays Defined Returns Autocall Fund 1 is an Open-Ended Investment Company (OEIC) designed to offer investors an attractive pre-defined return depending on the performance of the FTSE 100 Index.
A mirror of the popular Defined Returns Plan Annual Kick-Out, the new fund aims to provide investors on maturity a return equivalent to 6.5% net of fees multiplied by the number of years the fund is not called, and offers the chance of an early payout on any anniversary – from the third onwards – where the FTSE 100 is at or above its starting level. If the Index is at or above its starting level on the third anniversary, investors will receive 19.5%; should this not occur until the fourth anniversary, investors will receive 26.0%, and so on up to 39.0% for the sixth and final anniversary.
If the Index is below its starting level on each anniversary the fund will not be called, and investors will receive their capital back at maturity after six years, providing the Index has not fallen below 60% of its starting level. If this occurs, investors would receive capital back 1:1 in line with the Index (e.g. if the index at fund maturity is 35% of its starting level, investors will receive 35% of their capital back).
Commenting, Colin Dickie, Managing Director, Barclays Capital, says:
“The launch of the IFSL Barclays Defined Returns Autocall Fund 1 is a significant departure for the business and a reflection of where we see the structured products market heading in 2011 and beyond.
“With all the characteristics of our extremely popular Defined Returns Plan Annual Kick-Out, the fund is not only designed to appeal to a new audience of advisers and their clients, but also to existing supporters of the strategy seeking to manage their Barclays exposure in line with FSA guidance.”
“Having the fund available on the Cofunds platform should help ensure the fund can be accessed by a significant proportion of advisers.”