12 Apr 2011, SG CIB , Benoit Petit , Structured Products
The cross-asset solutions team lies at the heart of Société Générale Corporate & Investment Banking and is integrated into the global markets division. The division was established to meet the growing needs of our clients in the ever-changing landscape of the financial markets. It is designed as a fully integrated platform, consisting of global coverage teams specific to client segments – asset managers, private banks, pension funds, insurance companies and institutions. Thanks to synergies fostered between sales, engineering and trading, we are able to structure innovative solutions that combine client-driven advice with engineering know-how. Our sales specialists provide tailor-made solutions and services to our clients for a variety of asset classes, investment themes and objectives, while taking into account clients’ individual constraints and challenges.
Société Générale research – the foundation of cross-asset solutions
Our product proposals are based on the publications and ideas put forward by our renowned and globally awarded Société Générale research team. The team consists of 200 analysts, strategists and economists across all asset classes – foreign exchange, rates, commodities, credit and equity. It is designed to provide top-rated economic, strategic, sector, company and thematic analysis. Cross-asset research is Société Générale’s response to the ever-growing correlation between the different asset classes and investors’ demands for a comprehensive market analysis.
Research & Investment – combining expertise
In the summer of 2010, Société Générale’s Swiss sales team decided to combine the above-mentioned expertise into straightforward thematic investment proposals called Research & Investment. Taking a cross-asset approach, the selected investment ideas reflect market-timing opportunities, pick up economic trends and are easy to implement into investors’ portfolios. The focus ranges from macroeconomic trends, single asset classes, sector-oriented topics to thematic investments.
Each publication is based on market trends identified by the Société Générale cross–asset research team. In a few pages, investors get a quick analytical snapshot of the proposed investment theme that is then translated into investment solutions. Proposals include participation and income products with full or partial capital protection and maturities ranging from a couple of months to several years. Underlying asset classes range from equity indexes, stocks, mutual funds, commodities, currencies and interest rates to credit. Research & Investment is published on a monthly basis in English and French.
The first investment idea, put forward at the beginning of September 2010, was based on the conviction that the German economy would drive German equities to outperform their European counterparts. On the other hand, the Spanish economy was suffering. We therefore proposed to enter into a strategy aimed at benefiting from the spread between the DAX and IBEX on a one-year horizon. After three months, this strategy was already up by about 20%.
On the macroeconomic side, we also proposed investment solutions linked to gold in mid-September, either as a directional play or via yield enhancement products. The launch of the second round of quantitative easing by the Federal Reserve in mid-October gave us the opportunity to focus on currency investments aimed at benefiting from a depreciation of the USD versus a basket of currencies from countries with a strong balance sheet – such as Australia, New Zealand, the Nordic countries and Switzerland. Finally, Africa was an original investment theme that we put forward in November following the publication of a comprehensive study by our research team, strongly supporting the case for the continent to become a significant emerging market economy in the next couple of years.
For 2011, as market perspectives remain uncertain, we favour topics such as emerging market debt, relative plays between European countries and commodities, as well as investments in copper and nickel. The banking sector in Europe could also surprise in a positive way, although it remains a speculative investment.
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