CPPI retooled
Amanda Lee explores the development of CPPI technology following the market correction in May last year and finds that actively managed CPPI-based funds that offer access to cutting edge themes are all the rage with clients of private banks and, increasingly, retail banks too
The infamous May 2006 market correction sent shivers down the spines of structurers. At the time, the most common answer to questions regarding the impact of the correction was "wait and see". But almost one year on, the effects of the market movements are becoming clearer by the day. Weaknesses in constant proportion portfolio insurance (CPPI) mechanisms, at least, have been well documented. As markets suffered, so did CPPI structured products, inevitably meaning that some CPPI-based products
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