advisers ignorant of structured products

The 43% gain of the Barclays Target Growth Plan over the past three years is further evidence that those who have completely dismissed the structured product sector have done themselves and their clients a disservice, according to Ian Lowes, managing director of Lowes Financial Management.

advisers ignorant of structured products


His firm has now suggested its clients sell three of Barclays’ Target Growth Plans, ahead of their maturity dates in 2014 as a consequence of their great performance.

Barclays Target Growth Plan February 2009, April 2009 and June 2009 were all designed as five-year structured products offering maximum returns of 50% or 55% and Lowe said they can currently be sold for gains of between 43% and 50%.

Lowes Financial Management said that while these plans are highly likely to achieve their maximum gains by their ultimate maturity dates, the best annualised gain to be made by the three plans from this point is around 2.65% per annum.

For this reason there is a case for selling the plans in the secondary market and Lowes is recommending to clients that they do this.

“While we recommend structured products are bought on the basis that they are held for the full term, occasionally an event such as this occurs where it can make a lot of sense to sell the investment and reinvest the proceeds elsewhere.

“Not all structured products are good investments but these investments were among the best offered in 2009 and were very easy to understand,” Lowes said.

He also derided the myth that structured products are illiquid and have no secondary market, stating it is a myth born out of ignorance with both product providers and discretionary managers creating the demand for the plans.


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