Product wrap: Healthy returns index linked products across all regions in July

In a new feature, SRP highlights structured products in the five regions it covers. Today we are looking at the performances of a sample of the products which matured across Europe, North and Latin America, Asia-Pacific and Middle East and Africa in the month July.

Europe
A grand total of 2,132 structured products across 25 European countries reached their maturity in July, according to SRP data.

ABN Amro Wereld Garantie Note Juli 2010-2017 - Capital return at maturity 153% / 6.29% p.a.

The seven year-note, which was distributed in the Netherlands by ABN Amro and issued via Royal Bank of Scotland, was linked to the performance of a weighted basket comprising five indices (45% S&P500, 30% Eurostoxx50, 10% Nikkei225, 9.5% MSCI Emerging Markets, 5.5% MSCI Pacific ex Japan). At maturity, the capital protected product, which was listed at Euronext Amsterdam, paid investors the maximum possible return. In August 2014 the product was transferred to BNP Paribas when the French bank took over the market-making activities of the majority of RBS's investment products in the Netherlands.

KBC Exposure Conditional Plus US 2 - Capital return 192% / 11.15% p.a.

This six year structured fund was issued by KBC Bank in Belgium and collected sales of €17.66m at inception. The product was linked to the S&P 500, and, providing the index would never trade below 50% of its level on the strike date (June 6, 2011: 1,286.17), the product promised at maturity 100% capital return plus the greater of a return of 40% or 100% participation in the rise of the index. On the final index date, on June 30, 2017, the index closed at 2,423.41 points, hence the positive return.

Swedbank Investment Deposit 232 Sportswear Companies - Capital return 100% / 0% p.a.

Swedbank distributed this one-year structured deposit to retail investors in Estonia. The product was linked to the performance of three shares of sportswear companies (Nike, Adidas, Skechers) and promised to pay a 0.4% coupon at maturity, providing each share was at or above 105% of its initial level. However, despite a positive performance from Adidas (+33.47%) and Nike (+4.88%), the negative performance of Skechers (-1.03%) meant that the product returned 100% of the nominal invested with no additional coupon. This product was also available in a risk premium version, with an issue price of 101%.

North America
The number of structured products that matured in North America stood at 1,346 during July. Of these, 1,247 were listed in the US market while the remaining 99 products were available in Canada.

RBC LiONS Eurostoxx50 Booster Securities S3 - Capital return 136% / 9.18% p.a.

These 3.5-year securities were offered to Canadian retail investors via both RBC Dominion Securities and Laurentian Bank Securities. The product was denominated in Canadian dollars and linked to the Eurostoxx 50 index. The European benchmark index closed at 3,028.20 points on the start date (January 24, 2014) and increased by 14% during the investment period. Since the index performance was positive, but not higher than 36%, the product returned 136% at maturity.

JP Morgan Index Linked Notes - Stoxx Europe 600 (40054KES1) - Capital return 110% / 9.51 p.a.

The notes had a term of one-year and were available to investors in the United States. JP Morgan acted as the placement agent for the notes which were issued via GS Finance Corporation and guaranteed by Goldman Sachs Group. The product sold $1.42m in the US and the commission was set at 1.1%. The underlying index for the product - the Stoxx Europe 600 - increased by 16.43% during the investment term, from 332.24 points at inception to 386.84 points at maturity. However, since the overall maximum product of the product was capped at 110%, investors had to make do with an annual return of 9.51% instead of the actual annualised performance of 15.6%.

Latin America
Four hundred and sixty-five structured products matured in the Latam region during July. They included 138 products in Brazil, one product in Chile, and 326 products in Mexico.

Santander Brasil Ibovespa Premio Alta - Capital return 104.51% / 8.7% p.a.

This certificado de operações estruturadas (structured deposit) was available to retail investors in Brazil and had a term of just six months. The capital protected product was linked to the local Ibovespa Brasil Index which gained 9.85% during the investment period. Due to the products digital payout structure, investors received the fixed coupon of 8.7% at maturity.

Banchile Fondo Mutuo Booster USA Pesos - Capital return 127% / 14.04% p.a.

The fund, which had a term of one-year and 10 months, was the sole structured product that matured in Chile during July. The product, for which an annual management charge of 3.57% applied, offered 180% participation in the positive performance of the S&P 500 during the investment period, capped at a maxim rise of between 25.5 and 28.5%. Since the index increased by 31% during the period, investors received an estimated capital return of 127% at maturity.

Asia Pacific
There were 2,202 structured products that reached their maturity in the Apac region, including products in Australia (six), China (58), Japan (60) and South Korea (1,232).

DBS Bank 第 1715期3 个月人民币产品(EZVT)/3M CNY Note S1715 - Capital return 101.80% / 7.42% p.a.

This product was wrapped as a wealth management scheme and distributed by DBS Bank to investors in China. The product, which had a short-term of just three months, was linked to the CSI 300 index and had a sharkfin payout structure. Since the performance of the index did not exceed 120% of its initial level (April 20, 2017: 3,461.55), the product returned 100.25% capital return plus 20% of the rise of the index of the index over the investment period.

Middle East and Africa
Nineteen structured products matured in the Mea region during the past month.

Bank Leumi Dollar Deposit linked to European Bank Stocks (751) - Capital return 100% / 0% p.a.

The one-year structured deposit was available to retail investors in Israel. The product was linked to an equally weighted basket comprising the shares of Barclays, BNP Paribas, Credit Suisse, HSBC and UBS. The performance of each share was measured throughout the investment period and because all exceeded 124% of their initial level at some stage during the term, the deposit returned 100% of the capital invested with no additional coupon.