US Wrap: Flows stabilise as Deutsche Bank broadens US equity exposure

Seven issues were added to a consistent week of issuance yesterday. Alongside the staple of S&P 500-linked products, Deutsche added a broader slice of US equity exposure, with an accelerated growth product linked to the Russell 2000 index, the S&P 400 Mid Cap and the S&P 500, which is weighted 10% more heavily than the other two constituents. The product pays 200% participation in the index basket up to a cap of 14-16.4% and investors are protected by a 20% downside buffer. Merrill Lynch launched the more common accelerated return S&P 500-linked structure, but opted to use the external credit of Swedish Export Credit Corp.

A day earlier Citigroup Funding had combined the US market's most popular structure and underlying of the day with a reverse convertible offering exposure to the performance of the S&P 500. Reverse convertible structures are equity, not index-linked, but this problem is managed by linking the note (one of Citi's Elks, or equity-linked securities) to one of the exchange-traded funds which tracks the S&P 500's performance: the SPDR Trust Series 1.

The first shoots of diversification away from US