Henry says that the FSA’s increased interest in structured products as of 2009 served as a clear notice of its future intentions. “The direction of travel was clear once the FSA came out with its guidance on allocations to structured products. We have a large structured product range but we see a wider fund offering as a compliment to that,” he says.
Accordingly, Barclays Wealth last month launched two trend funds to the retail market: The Barclays FTSE 100 Trend Fund and the Barclays FTSE Protector 80 Trend Fund.
“We see the Trend funds as low volatility investments with defensive capabilities”, Henry says. The FTSE 100 Trend Fund’s smart-stop feature, activated when the index falls by 2.5% or more over a five business day rolling period, has been activated on average once a quarter, while the FTSE Protector 80 Fund has the ability to move up to 100% into cash depending on market conditions.
“The idea is that you can improve the risk-return structure by targeting volatility. The trend funds combine momentum investing and volatility control”, says Henry.
On structured products, which again caught the attention of the FSA in a recent consultation paper that suggested increased efforts should be made on the issues of transparency and promotional clarity, Henry said Barclays Wealth has a “robust governance framework” in terms of its own processes.
Henry believes the next area of regulatory focus for such products may centre on counterparties and collateral. “You have always had collateralisation control with Ucits through their 10% per counterparty rules. But we expect more to come on that front."
