The latest US issuance signals a move away from the staple reverse convertible to accelerated growth products, which industry participants predict will be a popular wrapper this year. The Barclays products all track benchmark indexes or those that are used frequently for products in the US market, such as the Dow Jones Real Estate Index. The Buffered SuperTrack Notes linked to iShares Dow Jones US Real Estate Index Fund is a one-and-a-half year investment that has a 200% participation rate, capped at 18.5–22.75%. They have a 10% buffer level, after which capital is lost at the rate of 1:1. There are three products linked to the MSCI EAFE Index Fund in this issuance, yet again following a trend for using funds as an underlying for a product. The index tracks stocks from the European, Australasian and Far Eastern markets, providing diverse equity exposure. One of these products has a one-year maturity and offers 200% participation in the index, with a cap at 18-22.5%. There is no principal protection at maturity so any fall in the value of the underlying will result in capital being lost at the rate of 1:1. The product has a riskmap rating of 7.4/10, which is quite high, but neither the product nor the underlying index have a high volatility rating, although the lack of capital protection will count against it. US wrap: Making the move from reverse convertibles to accelerated growth...
Start a FREE trial or subscribe to continue reading:
Start a 4 week free trial
Try Risk.net's premium content for a limited period. Register now for your FREE trial to one of our leading brands.
*not available to previous trialists or subscribers.
Log In or Subscribe Now
Subscribe to Risk.net Business now to access all our premium news & features content for 1 year.
Pay by Credit Card for immediate access.