Barclays is hoping to capture the imagination of China bulls with its latest Hong Kong structured product. The China Accelerated Growth Fund is basically an H-share index tracker that gives added returns in a strong bull market, which results in an overall return to investors that is consistently better than the index itself.

That is quite an achievement given that the index has risen by about 500% from five years ago. "This product is suitable for investors who believe in China's economic growth story," says Wendy Kwan, director of investor solutions, Hong Kong retail sales, at Barclays Capital. "It offers investors extra return in a bullish market environment and one-on-one exposure to the H-share index's performance in flat or downward market conditions."

The strategy is simple enough. The fund tracks the performance of the Hang Seng China Enterprises Index with a zero-strike call û a deep-in-the-money option that moves in tandem with the underlying asset. The accelerated returns kick in if the index rises more than 5% in a month, which is achieved with a call option that strikes at 105% and provides 200% participation in any further upside.

For example, if the index starts at 100 in January and rises to 108 in February, the strategy returns 11% û one-for-one participation in the gain up to the 105 level, then 200% participation from 105 to 108.

Hong Kong's regulator prevents banks from providing historical data to show investors how a product would have performed in the real world, but in this case it's easy enough for punters to work it out for themselves.

The call options are set to strike on the second-last trading day of each month and the index returns also accumulate on the same day, which means that a strategy starting on May 29, 2006 would have returned almost 90% by the end of May this year, compared to the index's 55% return during the same period.

Medium-term results are also impressive. A five-year investment in the accelerated growth strategy would have generated an annual return of about 66%, before costs, compared to 34% from the index.

The fund has a minimum investment size of HK$20,000 and is on offer until June 26. The initial subscription fee is 5% and the investment management fee is 1.75%. It is expected to launch on July 4.

The H-share index comprises 41 large-cap stocks drawn from China's leading industries, such as banking, insurance, energy, telecoms, property and infrastructure.