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Product category: Savings and investment
News Release from: Barclays Wealth Management | Subject: Investments
Edited by the Insidemoneytalk Editorial Team on 22 May 2008

Barclays Stockbrokers targets investors
seeking access to commodities

Diversified Commodity Investment Note linked to the performance of a basket of commodities

Designed to produce 130% of any rise in the basket Sales of Exchange Traded Commodities up 597% on Q1 2007 With demand for commodities at an all time high Barclays Stockbrokers today announces the launch of a new Investment Note giving investors access to a range of commodities; these include energy, precious metals, base metals, and agricultural and livestock

The Diversified Commodity Investment Note is linked to the growth of a basket of commodities and is designed to produce 130% of any rise in value along with repayment of capital if held for the full five year term.

The five-year Note offers investors the opportunity to capitalise on continuation of commodity price inflation while diversifying their portfolios away from traditional equity based investments.

Investments can start from as little as £500 and can be held within a Self Select ISA or SIPP.

Tom Ryan, Head of Proposition at Barclays Stockbrokers says: "This new Investment Note has been designed for investors looking to diversify their portfolios and benefit from positive returns of the commodity markets.

We've seen a staggering 597% increase in customers investing in the commodities sector this year compared to the same period last year, reflecting increasing investor demand for the sector.

This Note has the added benefit of geared returns so investors will receive 130% of any rise in the underlying price of the commodities.

Investment Notes are designed to deliver attractive returns, often on sectors that are not available to individual investors, but also provide repayment of capital provided that specific conditions are met.

They also offer the flexibility of being able to buy and sell on a daily basis." Henk Potts, equity strategist at Barclays Stockbrokers, says: "Record commodity prices have dominated the headlines and moved the markets over the past few weeks, and our research suggests we're going to have to live with higher prices for some time to come.

Commodity prices are likely to stay volatile in the short term - the key risk being recession in the US.

Nonetheless even if there is a US slowdown, we believe supply constraints and ongoing industrialisation in China and other emerging economies will support many commodities and should largely offset any drop in demand.

"In agricultural commodities for example there are tight supply / demand balances and market dynamics.

"In the crude oil markets, the evidence continues to point towards a steady tightening in fundamentals".

"Our current oil price forecasts are above market consensus.andnbsp; While we believe a correction is possible from current price levels, the risks to our average yearly forecasts are still on the upside." The flexible nature of Investment Notes means that an investor may choose to receive the capital protection offered by holding the Note to maturity or can sell the note before maturity to realise shorter term gains.

However, if sold before maturity an investor may get back less than they invested.

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