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Barclays Wealth

Type: Commodity select protected investment.

Description: Barclays Wealth has reissued its Commodity Select structured product amid popular discussion of commodities as a primary inflationary driver. This five-year investment offers exposure to a diverse basket of individual commodities covering the four sub-asset classes of energy, 52.5 per cent, agriculture, 20 per cent, and base metals, 20 per cent, and precious metals, 7.5 per cent. Investors receive 115 per cent of the performance of this basket of stocks, unlimited. If held until maturity, the capital is 100 per cent protected. The minimum investment is £3600, the maximum is £500,000. There is an early investment discount of 4 per cent on the initial capital from the date of investment until maturity.

Conditions: Offer closes on 20 August 2008. Charges have been included within the investment and are not expected to have exceeded 7 per cent by maturity; no explicit charges are applicable. The commission rate is 3.5 per cent. Withdrawals are permitted on a fortnightly basis but may affect the return at maturity and will render the capital protection void.

Contact: www.barclayswealth.com

Verdict: There has been a lot of coverage of commodities recently and this product is obviously aiming to capitalise on the good news of recent high returns in the sector. While this is expected to continue, particularly in energy which the fund is largely invested in, there is a suspicion that investors would be buying at the top of the market and be tied into this for five years. There is the old argument about direct investment or the capital guarantee of a structured product to gain exposure to an asset class, but in this case perhaps the 115 per cent return on any growth plus a capital guarantee for exposure to a sector that could help hedge against inflation will be attractive to many.

Rating: 3/5