Structured Products - Volume 6/No 9
Articles in this issue
Building resumes on property products
Less volatile than equities and on offer in a variety of forms and available in either growth or income style, commercial property has made a low-key return to the investment world. As property values recover, access comes in the form of exchange-traded…
ETFs: investors’ flexible friends
Exchange-traded funds have proliferated in Europe, offering institutional investors enormous investment choice and liquidity at a low cost. We find out how and why these products are attracting the interest of a diverse range of investors and look at the…
Italy’s new structured products landscape
The collapse of Lehman Brothers, a bank that had produced massive amounts of index-linked products for the Italian insurance sector, left retail investors weary of structured investments and led to a big regulatory shake-up. What role can structured…
Robert W Baird: succeeding through caution
Setting up a business just before a global financial crisis hits is not ideal, but Robert W Baird’s structured products business, set up in 2007, has survived the turmoil by sticking to conservative products and avoiding the more complex deals offered by…
Seeking simplicity
As the Benelux region’s structured product market emerges shaken from the global financial crisis, a focus on education is needed to rebuild investor confidence and to make sure structured products are being sold in an appropriate manner. Clare Dickinson…
Taking on variable risk
The variable annuity business in Asia continues to attract banks and insurance companies. The potential market is of a staggering size which would far surpass the volumes in the US or Japan, the two biggest users of the products. Harry Thompson…
ETFs: simple, or simply confusing?
Exchange-traded funds first appeared 20 years ago as transparent, easy to understand alternatives to actively managed funds. But as they have developed some of this transparency and simplicity has been lost. The first Structured Products ETF survey asks…
Product performance
The three products reviewed this month all have a strike date of 11 December 2009. The products are valued weekly and the results are shown along with the performance of the underlying asset. All three products are fairly typical of products that are…
FVC custom indexes
The three FVC indexes fell between April and May 2010, mirroring the falls in the market’s benchmark indexes
Market snapshot
A dramatic increase in the notional issuance of accelerated growth products in the US has catapulted Bank of America to the top of the issuance charts
Locking in principal protection
Merchant Capital is offering UK investors an at-risk growth product linked that locks in capital protection should the daily closing be at or above 110% of the initial level. Morgan Stanley is the issuer.
Malaysian investors hunt for hybrids
Hybrid structures are increasingly popular in Malaysia as investors look to keep the cost of hedging down and moving away from capital protected products
Desperately seeking a benchmark
The market for exchange-traded funds in Asia has been slow to develop. A regional benchmark ETF is still lacking, while the promise of high-volume trading in products cross-listed from Europe and the US has yet to materialise. Richard Jory reports from…
World Cup trades hit fever pitch
As the dust settles on the World Cup and those that bought televisions on the basis that their national football team would win the tournament wonder how to match their rash expenditure with reality, Richard Jory reviews the copious research supporting…
Morgan Stanley Jump
Morgan Stanley has issued Jump Securities, a structured products based on the performance of a basket composed of the iShares MSCI Emerging Markets Index Fund and the Dow Jones Eurostoxx 50. Principal is not protected and the upside above the target…
Gold ETFs hit new highs as currency fears proliferate
In flows to gold reached record highs over the last two months as investors move their asset allocation from currencies such as the Euro into physical gold
A complex payoff
The Royal Bank of Scotland has created a complicated retail structured product based on volatility for the Australian market and teamed up with National Australia Bank to help with distribution. Capital for the seven-year product is protected at maturity…
Uncertainty over FDIC insurance is affecting structured products industry
The US government is currently deciding whether to permanently increase the deposit insurance cover to $250,000 per depositor. The uncertainty is creating problems for the certificate of deposit industry.
RBC offers BP play using reverse convertible
The Royal Bank of Canada has issued a new reverse convertible based on BP. The oil company's shares have risen in the US market in recent trading despite hitting a 13-year low on the London Stock Exchange in June
SEC and exchanges to implement market-wide halt mechanisms in bid to prevent another flash crash
ETFs were particularly badly hit during the flash crash that hit the US stock market on 6 May. This occured due to withdrawal of liquidity from the market and the industry is now working to prevent a repeat.
S&P creates taxable municipal bond index
Standard and Poor's has created a taxable municipal bond index to give investors access to this low default risk, high return bond class.
Higher insurance premiums for structured products make RDR compliance difficult
Some professional indemnity insurers are charging higher premiums for structured products or are refusing to cover them. This makes it difficult for IFAs to offer them to their clients
Eurozone volatility helps German structurers
Volatility across the eurozone is making autocall products popular in the German market, where structurers can offer attractive returns
UBS reverse convertible index offers deposit-beating returns
UBS has created a reverse convertible index to offer German investors income which beats the return on bank deposits
Nasdaq creates its first sharia indexes
Nasdaq has launched two sharia-compliant indexes, the first in a family of indexes which it intends to launch.
UK investors swap FTSE 100 ETFs for emerging markets
Investors withdraw from ETFs based on the FTSE 100 in the first quarter of the year, preferring investments based on emerging markets and the US and European becnhmarks.
Source offers European ETF investors access to volatility
Source has brought exposure to volatility to the European market through an ETF based on the S&P 500 Vix Futures Index
Vanguard expands ETF offering with products on equities, fixed income and property
US ETF company Vanguard has increased its business with products on US equity benchmarks, real estate and bonds
South Korea implements product pre-approval regulation
South Korea launched its new derivatives product approval system in June but issues remain
Skandia offers the insurance route
Global savings and insurance heavyweight, Skandia, has been distributing structured products in Sweden since 2005 when it launched two products with Skandiabanken as issuer. Since then the Swedish branch has gone on to use various other intermediaries…
Lee reappears at Deutsche Bank as head of GMIP and db-X, Asia
Chris Lee has taken over global market investment products and the db-x division in Asia for Deutsche Bank. Formerly head of the structured products group at UBS, Lee started at Deutsche in the last week of June.
Hong Kong Structured Products Bill ready for first reading
The introduction in Hong Kong of the new laws for structured products took one step closer with the announcement of a first reading for the bill on July 14. A lengthy consultation period that followed the creation of the first draft of proposals has…
Daiwa buys KBC's Asian equity derivatives and global convertible bonds operations
Daiwa Capital Markets has extended its move into structured products with the acquisition of KBC Group's Asian equity derivatives business
Lookback: The Which way
An irreverent take on events of the last month, including the Which confusion over structured products, ETF trading, S&P's benchmarks, a Swiss preference for capital protection and more capital gains tax in the UK
Sponsored Q&A: Valuation and transparency – Facing the challenges of risk and transparency
Why organisations need better risk management and transparency to adapt to the changing marketplace
