Research from structured product provider Gilliat Financial Solutions has found the FTSE 100 index has never breached the 50% capital protection barrier over any five-year term.
The firm says this demonstrates the importance and value of capital protection to structured product investors.
"As there has been a lot of misunderstanding in the marketplace about capital protection barriers, we think it is important to equip financial advisers and their clients with the facts," Gilliat managing director Adrian Neave says.
"Our research shows structured products make it possible to gain exposure to different asset classes and at the same time manage risk within an investment portfolio."
Using historical data between 3 January 1984 and 21 August 2009, Gilliat found five year products using a European style 50% capital protection barrier showed a 0% result of barrier breaches.
Gilliat analysed both American and European capital protection models reviewing 50%, 60% and 70% capital protection barriers.
Across both models, and across all barriers, the worst scenario was the American model with a 70% capital protection barrier, which would have provided an investor with the full return of their capital in 83.70% of cases.
By comparison, Gilliat says if an investor had invested directly into the FTSE 100, during the same period of the research, then they would retain their investment capital in 77.79% of instances.
