Barclays Five year protected FTSE plan

Market_Oracle

richgirl wrote:

Some may automatically say its crap, but the fact is that most fund managers fail to beat the indices

Investment fund managers are handsomely rewarded individuals whose prime goal is to deliver superior returns to the wider stock market. Then why are so many of them falling down on the job?
Typically, a mere one in five fund managers beats the index they are benchmarking, whether it’s the FTSE 100 in the UK, or the S&P 500 in the US. Most trail rather embarrassingly, although they’re not so embarrassed as to decline their six-figure salaries, or repay any of those hefty management charges.

http://personalfinance.money.msn.co.uk/msnpf167.htm

dunstonh

Typically, a mere one in five fund managers beats the index they are benchmarking, whether it’s the FTSE 100 in the UK, or the S&P 500 in the US. Most trail rather embarrassingly, although they’re not so embarrassed as to decline their six-figure salaries, or repay any of those hefty management charges.

That isnt really accurate though. It sounds like a good headline but if you remove closed funds and passive managed funds (which you never really want to be in, although some closed funds are very good), then its nothing like that figure. The old managed versus tracker debate has winners on both sides. During periods of growth the trackers figures will look very good. In periods of decline, the managed funds figures will usually look better. Pick different periods and you get different outcomes.

whambamboo

richgirl wrote:

Positives -
* Early 20% exit option (7.5% AER).

That's actually a negative. I'm not sure what you mean by 7.5% AER. But basically you can opt *if* the level is 20% higher than the initial buy-in after 2.5 years, then you will be given your money at this point.

This is a *bad* thing, because you paid 6% to get in in the first place. So if the product is so wonderful you would want to stay in for five years, to get value out of your 6% initial charge (at that level you'd think it was a hedge fund returning 20% PA, not a crappy GEB). If it isn't wonderful, it rather begs the question of why you invested in the first place.

Choosing this option decreases you return, because you have paid 6% to get in in the first place, and paying 6% for 2.5 years is obviously worse for you, and better for Barclays, because you've paid the same amount of money for a shorter investment term....

richgirl wrote:

Negatives -
* Averaging of the final level of the FTSE over 12 months
* No dividends (20% value)

Some may automatically say its crap, but the fact is that most fund managers fail to beat the indices

Er, so get a FTSE-100 tracker and keep the dividends and don't worry about the fund managers.

There's another thread about this now, and it's clearly a garbage product.

And don't forget the 6% (!) initial charge.