Hybrid structures tempt investors

Volatile and uncertain markets have got investors thinking about diversified exposures to multiple asset classes both as yield generating opportunities and portfolio hedges. Hybrid structures, which blend discrete asset exposures into one pay-off, are seeing something of a resurgence among US institutional and retail buyers, although notional volumes remain small. Joti Mangat asks whether hybrids can become more than a marginal product set

Multi-asset-class structures are increasingly popular

Demand from US retail and high-net-worth investors looking to generate yield and achieve diversification is driving renewed interest in cross-market plays, according to Richard Couzens, director, head of product origination for Investor Solutions at Barclays Capital in New York. “Investors seeking to avoid specific directional views, or that want to reduce overall volatility in their portfolios, have been relatively active buyers of hybrid or multiple asset class structured products.” Barclays’

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