Barclays Private Clients, Premier Banking, is today launching a new gold bond, thought to be a forer...
Barclays Private Clients, Premier Banking, is today launching a new gold bond, thought to be a forerunner of its type in the market.
This gold bond is the first of a new range of commodity bonds offered by Premier Banking.
A 100% capital guarantee will be offered at the same time as investors will have the possibility to make a 10.25% return on their investment at the end of the six month period, Barclays says.
There will be two variants of the bond, one where a return can be made on the price of gold increasing, and another one on the price of gold decreasing.
In the two versions, the return to the client will be 5% if the price is 10% greater or smaller at the end date compared to the start date, equating an annual rate of 10.25% gross.
In addition, the client will get back 100% of their original capital when the bond expires on November 19th, according to Barclays.
A third option of investing in a equal combination of both is also available for investors who think the price on gold will be volatile.
If the gold price increases of decreases 10% the return to the investor will be 100% of their capital plus 2.5%, or 5.1% AER.
"There is currently mixed opinion about the direction of gold prices, with some believing the end of the war will lead to a fall, others believing uncertain economic conditions give scope for gold prices to rise even further. Others just think it will remain volatile," says Russell Prior, marketing director of Barclays Private Clients, Premier Banking.
"By having two versions of the product we will be able to offer clients the option to back their opinion without risking capital."
For people interested in the bond, the minimum investment is £50,000 and the maximum £1m.
Will assess regulation
Client was warned of risk
Megan Butler keynote speech at Women in Finance summit
Market anticipates a May hike
Newly-formed Mobius Capital Partners