Barclays 5 yr investment note

peawack

A question for the many financially astute brains on here-

Barclays offer a 5 year deal on ftse100- the Protected Supertracker Investment Note.
It pays 4 times any rise in FTSE 100 on maturity, up to 50% of the original investment.
100% capital investment guaranteed. The note can be sold before maturity, is fully tradeable and can also be part of an Isa.
On the face of it i think it will give better return than a deposit account, say we assume a flat 6% rate. No dividend payments however.
Am I reading this right ? I would like to hear some other opinions on this one.

sabretoothtigger

50% over five years is less then 10% a year. Halifax offers a 10% regular saver I think which would compound to more over five years, this isnt an isa though

I heard of worse bonds, typically they only offer these when it suits them, the odds show a profit from possible returns, etc


Interest rates are apparently going to drop

dunstonh

What an awful version of a GEB. Although that is quite normal for Barclays.

sabretoothtigger

I was reading about capitulation and how the markets are so low because funds are rare now. Hedge funds can only take so many losses before they have to close, due to leverage, etc.

Big bargains exist in theory but not the money to buy in, thats why they want your money & are offering the guarantee to draw in savers who would not normally invest.
They hope to make much more then 50% from your money Im sure, Barclays are crafty

sabretoothtigger

I got offered one of these by Egg today.

Heres the terms just to compare:

5 year duration
175% return on any ftse gain in that time upto an overall maximum of 65% (10.53%AER)

Money guaranteed to be returned if it falls

The gain is absolute, no averaging. 2 Dec 08 to 2 Dec 13 If it falls 20% on that day, hard luck



Sounds like a better deal then the barclays one because of the higher gain cap but I'd still opt for monthly payments to a tracker personally, you get dividends from a tracker and it'll go in an isa but not the bond above afaik
However if it was a choice between 5 year of savings account and this, I'd take this

peawack

Yes I would chooe the 5 yr deal above the savings account, but I'm not convinced that these products are all that beneficial compared to the purchase of 'reliable' equities.
Picking some 'reliable' equities is, I know, the problem. However, I also think that maybe we are near to the time when they can be found.

sabretoothtigger wrote: »

I got offered one of these by Egg today.

Heres the terms just to compare:

5 year duration
175% return on any ftse gain in that time upto an overall maximum of 65% (10.53%AER)

Money guaranteed to be returned if it falls

The gain is absolute, no averaging. 2 Dec 08 to 2 Dec 13 If it falls 20% on that day, hard luck



Sounds like a better deal then the barclays one because of the higher gain cap but I'd still opt for monthly payments to a tracker personally, you get dividends from a tracker and it'll go in an isa but not the bond above afaik
However if it was a choice between 5 year of savings account and this, I'd take this