Barclays Wealth has launched the 13th issue of its six-year Emerging Markets Optimiser (EMO) structured product, with performance linked to an ETF.
The EMO bases returns on the iShares MSCI Emerging Market index fund, an ETF which provides exposure to 21 emerging markets, with heavy weighting to the BRIC markets.
Using a risk adjustment strategy of dynamic allocation, EMO seeks to manage market volatility while retaining the emerging market sector's growth potential.
Broadly, the Optimiser decreases its exposure to the iShares MSCI Emerging Market ETF when it becomes more volatile, and increases when conditions are calmer.
By adjusting its exposure to the index fund on a daily basis, Barclays says the EMO effectively smoothes investment returns.
Barclays Wealth vice president Lisa Chaudhuri says EMO's strategy facilitates emerging markets access for the more risk-averse retail investor.
Investors in the six-year investment are guaranteed 100% of their capital at maturity, irrespective of the performance of the underlying index. If joined now, the Optimiser provides investors with 72.5% of the index return; this will fall to a 70% return in January 2011.
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