Feature
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…
Funds find favour
Funds are the structure of choice this year, as the exchange-traded funds business grows and structured product houses look for fund solutions. But the fund industry has its limitations, not least because of the complexity of structuring and the expense…
Scrambling for yield
The rebound of credit markets in 2009 enabled product providers to decrease risk as well as offer higher yields to investors in the Americas, using techniques such as multipliers or digital payoffs. The result is an increase in the number of deals,…
Powering up
Utility companies in Japan and South Korea are changing the way they purchase coal after being hit by volatile price swings in coal during the past three years. And their efforts to improve risk management are helping the development of both coal indexes…
After the storm
Asian airlines and other heavy users of fuels received a sharp lesson about the risks associated with their hedges after fuel prices peaked in 2008 and then collapsed during a six-month period. How have they moved to improve their risk management…
Return to variance?
Banks and investors were hammered on short single-stock variance positions during the crisis, causing many dealers to pull back from the variance swap market altogether. Instead, some have been pushing volatility swaps as an alternative, but not everyone…
Regulatory straitjacket?
South Korea introduced a raft of new legislation with the aim of helping make Seoul a world-class financial centre prior to the financial crisis. But the events of 2007–08 proved a game changer as regulators grappled with the damage wreaked by kikos and…
A sting in the tail
After recent financial turmoil, market participants are thinking much more rigorously about ways to protect themselves against the possibility of rare but extreme events. However, effectively hedging tail risk is not straightforward. By Mark Pengelly
Coming of age
As Australia braces itself for a shift to a fee-for-service regime for financial advisers, low-cost, relatively transparent products such as exchange-traded funds look set to flourish. Wietske Blees reports
Get to grips with liquidity
New liquidity risk measures due to be adopted in forthcoming international bank capital rules will present risk management systems with significant challenges. Christopher John Brickhill discusses some of the most pressing issues and offers potential…
Containing contango
Commodities are back in favour with investors looking for diversification and absolute returns. But market conditions, coupled with the fact that most commodities remain in contango, means passive beta investments could disappoint. How are dealers…
Tipping point?
The global financial crisis has demonstrated the Australian credit default swap market is more liquid than its counterparts in the rest of Asia. Nonetheless, Australian investors have failed to take advantage of large arbitrage opportunities and the…
Putting the building blocks in place
The concept of using derivatives for risk management is still relatively new to utilities in India and is viewed with caution by market regulators. Katie Holliday talks to market experts about how they expect the discipline of risk management to develop
Trading and assets misaligned?
The interests of trading desks may not always be aligned with the best interests of a vertically integrated company’s assets. Charles Ford discusses some approaches that address this issue
Metal mania
China is the world’s fastest-growing consumer of base metals and its appetite for raw materials has resulted in a staggering growth in onshore listed derivatives. But its relevance to the institutional markets is still limited. Georgina Lee reports
Responding to data theft
Secrets and lies
KID Roundtable
The European Union plans to introduce the Key Information Document, a shortform document that will make investing in structured products easier. Richard Jory talks to structured products professionals about the form for the initiative
Reversal of fortune
Inverted swap spreads have defied earlier predictions that they were a short-term aberration to still be a feature 18 months after their first appearance. Is this set to continue and, if so, does it pose an opportunity for pension schemes and insurers?…
Knowledge is power for IFAs
The financial crisis has inspired independent financial advisers to offer more structured products to their investor clients. This change has been bolstered by the educational and training initiatives that have helped to give 75% of IFAs some form of…
UK issuance data: key statistics
A comprehensive breakdown of issuance data for the UK stuctured products industry since 2006, including numbers of products issued, underlyings and typical maturities
Naming the counterparty: how far would you go?
The debate in the UK over counterparty naming and inclusion of the issuer prospectus in marketing material for structured products continues. Richard Jory asks industry professionals what should be revealed and what is the minimum credit rating retail…
UK providers go back to basics
At a time when there is little innovation in payouts, structured products providers in the UK are looking at ways to broaden the investor base by offering more stock exchange-listed products and funds, and take market share from the vast fund sector…
Tax information exchange agreements and the Cayman Islands
Cayman Islands: Facing a challenging future with confidence
Modernisation of e-reporting continues in Cayman
Cayman Islands: Facing a challenging future with confidence