Lowes Financial Management recommends investors sell out of three Barclays growth plans, after a strong case for selling the plans in the secondary market emerged.
Lowes has recommended selling three five-year investments, all Barclays Target Growth Plans – maturing in April, June and August 2014 – in the secondary market. According to the firm, investors are likely to achieve greater returns through selling and reinvesting in other products in the market compared to remaining invested for the annualised 2.65 per cent that the Barclays plans will produce over the remainder of the term.
The maximum returns on the investments are either 50 per cent or 55 per cent, but these products can currently be sold for gains of between 43 per cent and 50 per cent.
Lowes believes the products are highly likely to achieve their maximum gains by their ultimate maturity dates, but because the best annualised gain to be made by the three plans from this point is around 2.65 per cent per annum there is a case for selling the plans in the secondary market.
Lowes Financial Management managing director Ian Lowes says: “If we take the June 2009 Barclays Target Growth Plan which was designed to be held until August 2014, and was recommended to clients on that basis, it has already gained around 43 per cent.
“While the maximum gain in around 21 months time is 50 per cent, and it looks extremely likely that this will be achieved, this represents an annualised gain from the current value in the region of just 2.65 per cent per annum. In the circumstances, we have advised our clients that it may be appropriate to consider selling the investment now.”
Lowes adds: “While we recommend that 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.
“This will create the opportunity to engage in a more favourable investment environment and achieve a gain that is greater than the annualised return that seems likely to be realised from this particular structured product over the remainder of its term.”