Barclays Launches FTSE Linked Income Bond

Written by Editorial Team

23 October 2010 / by Paul Dicken

Barclays Wealth has launched a six-year income-paying bond linked to the FTSE 100 index, offering 5.6 per cent interest annually.

The Regular Income Bond, a structured investment, requires a minimum £5,100 and will pay a fixed 5.6 per cent interest annually.  A monthly income option is available paying 0.46 per cent each month.

A capital at risk investment, capital will only be lost if the FTSE falls to a level more than 50 per cent below its level at the start of the investment at the end of the term.

Should the FTSE be lower than 50 per cent of its starting level on maturity, 1 per cent of capital would be lost for every 1 per cent below the 50 per cent barrier.

Vice president of Barclays Wealth, Lisa Chaudhuri, said: “With interest rates continuing to stay at record lows, and consensus suggesting they may stay there for some time to come, investors are having to look further afield for alternative means of deriving income.”

“Our new RIB is designed to bridge the gap between risk and reward by offering an attractive return while ensuring investors will receive their capital back at maturity unless the index falls by 50 per cent during the term and is below the starting level at maturity.”

Return of capital is also dependent on the financial counterparty to the investment – Barclays Bank – being able to repay capital and the stated returns.

© Fair Investment Company Ltd