Market snapshot: Euro Stoxx 50 maintains its popularity in the US

HSBC is the number one issuer of new structured products in the US registered market in November, with Investec holding its own as the biggest issuer of products in the UK

Tim Mortimer, Future Value Consultants

In November 2013, the volume of new products issued in the US structured products market decreased from the previous month, based on notional amounts and number of products issued. Total notional was equal to $1.31 billion across 293 products, led by leveraged return notes, which accounted for $810 million of notional sold and a 61.6% market share. The second most prolifically issued notes were digitals, which accounted for roughly 14.8% of the US market, recording $194 million of notional. Autocallables also proved popular, with $77 million dollars of issuance and a 5.9% share of the market.

HSBC was the most prolific issuer of structured products in the US-registered market in November, pumping out $252 million of notional and claiming a 19% market share. Bank of America released slightly less volume - $243 million - which amounted to an 18.5% market share. Barclays maintained its revived position in the top echelons of issuance in the US, coming in third on a notional volume of $166 million, a 12.7% stake in the registered market.

The most favoured underlyings in the US remained the S&P 500, although the Euro Stoxx 50 has held its own as the next most favoured index. Together, the two indexes took more than 57% of the total notional recorded for November. Other popular indexes were the Dow Jones Industrial Average, the MSCI EAFE and the Russell 2000. The most popular stock used as an underlying was Apple.

Tenors remain predominantly short term in the US, with more than 30% of new products lasting around 12 months.

In the UK, the most active provider was Investec Structured Products, which took almost 35% of the market based on numbers of products launched. In second place was Gilliat Financial Solutions and Societe Generale, with each taking around 9% of the November new issuance market.

Around two-thirds of products released in the UK had a variable maturity. Investors like the product type as it offers a good chance for a successful kickout and then an opportunity for early reinvestment. Other popular product types were capital-at risk income and simple growth products.