Trade of the month: Split underlying products
Tim Mortimer reviews split underlyings and assesses the value of dividing the basis of the upside and the downside in structured products
Split underlying structured products are those in which one or more underlyings are used to generate the upside return and a different asset or combination of assets is used for the downside risk.
An example is the new product issued by Morgan Stanley that is reviewed on page 34. In that product, the upside derives from the average of the best-performing 11 of a basket of UK stocks and the downside is linked to the FTSE 100 index. Such a construction is designed to take advantage of different
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