Barclays wealth "defined returns plan"

triplea35

triplea35 wrote: »

You can buy these products from an execution only ( no advice) online broker and receive as much as 2.5% of the commission paid to the broker back. The commission return was added to my original investment.
I used: http://www.moneyworld.com/Income_Bonds/index.htm
the link should give a wide choice of the plans available from different companies.
A similar plan to the Barclays Wealth is the Investec Enhanced Kick Out Plan which pays a higher return for presumably a higher risk company though Investec appears a well established Bank. They are currently offering 12% with Investec and 10.25% with Santander.
I took one out(Plan 6) last October when the FTSE was 5281 so will mature if the closing 5 day average upto the 19th October is above this.
If it does then I will receive 12.5% interest on my original capital+ 2.5% so in effect a 15.3% return. Their previous five Enhanced Kick Out Plans (first one was in March 2009) have all matured after one year.
I did not invest a huge amount and am not too concerned if it doesnt mature in October, almost preferable to have it run another year or two until maturity.
Another thing worthy of note is the return on capital is only actually subject to Capital Gains Tax and can be kept in a ISA.
I chose not to put it into an ISA and will use it to utilise some of my wife and I's Captial Gains allowances (2 x £10100)

I am certainly not qualified to offer any advice and just relaying my experience todate of using a similar product.

Just an update on this for anyone interested.
My structured product, an Enhanced Kick Out plan with Investec, matured after one year on the 19th Oct and the funds were in my current account on the 21st. My returns, 15.3% as described above, were better far better than the rise in FTSE which was about 10%.

My only regret is that I didnt put more into it than I actually did.

The question now is whether I should go back into another one. As the FTSE has continued to rise there must be a slightly greater risk that the starting price cannot be beat at the next four yearly possible maturity dates. If the plans keep maturing after one year and you reinvest in one there is surely going to come a time when the bubble will burst.

Cautious_Investor_3

triplea35 wrote: »

Just an update on this for anyone interested.
My structured product, an Enhanced Kick Out plan with Investec, matured after one year on the 19th Oct and the funds were in my current account on the 21st. My returns, 15.3% as described above, were better far better than the rise in FTSE which was about 10%.

My only regret is that I didnt put more into it than I actually did.

The question now is whether I should go back into another one. As the FTSE has continued to rise there must be a slightly greater risk that the starting price cannot be beat at the next four yearly possible maturity dates. If the plans keep maturing after one year and you reinvest in one there is surely going to come a time when the bubble will burst.

Hi

Glad to see you have made a positive return that you are happy with, surely the mark of a good investment.

As with any investment, Structured Products are right for the right person and wrong for the wrong person, it really is as simple as that.

The Cautious Investor