Spotlight: Barclays Wealth's protected investments

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The Independent Online

Savers caught between a tough equities market and falling interest-rates may think Barclays Wealth's new range of protected investments look attractive. They offer geared exposure to stock markets or a high level of fixed income, and provide some protection for your initial capital.

For high income, there is a five-year investment bond linked to the FTSE 100, with a fixed annual income of 7.75 per cent. Or there are three- and five-year Super Trackers, promising to provide three times the return of the FTSE 100, up to a maximum return of 60 or 100 per cent on each product respectively.

But these savings vehicles have a precipice – if the index falls by more than 50 per cent during the term and is lower at maturity than it was when you took the product, your savings fall off a cliff and you'll lose money on a 1:1 basis. So if the FTSE 100 loses 49 per cent of its value during the term, you'll get all your capital back, but if it loses 51 per cent, you'll lose more than half of it. If you need capital protection, there are safer options.

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