Goldman Sachs has launched the first structured product based on the UK Investment Property Databank (IPD).The tracker, which will be quoted on the London Stock Exchange, is linked to the all-property index of the IPD. It expires in March 2011 and carries a 2.8% management charge - comparable, Goldman Sachs said, to the cost of buying and selling a conventional property unit trust over the same period.
The property derivatives market has seen growing activity during the past 12 months, but Goldman Sachs' product is the first listed tracker.
A survey carried out last year by the London-based Property Derivatives Interest Group found high demand for property derivatives among institutional investors, which is the main target for Goldman Sachs' new tracker. But it also found that most investors would prefer more specific underlyings to the all-property index, to allow tactical reallocation.
Derivatives are considered preferable to direct investment because of the expense of stamp duty and other transaction costs of investing in property directly. They also provide the ability to structure exposures more accurately.
Topics: Goldman Sachs
More on Structured Products
Four platforms are now fighting for private bank business
Autorité des Marchés Financiers aiming to prevent losses among speculative investors
Retail brokers accused of stealing bank business with little oversight
High-net-worth investors pile into dollar and commodity structures as PBoC loosens
Sign up for Risk.net email alerts
Sponsored video: MarketAxess
Sponsored video: Tradeweb
Multifonds talks to Custody Risk on being nominated for the Post-Trade Technology Vendor of the Year at the Custody Risk Awards 2014
Sponsored webinar: IBM Risk Analytics
There are no comments submitted yet. Do you have an interesting opinion? Then be the first to post a comment.