Societe Generale launches second generation turbos in the Netherlands

Societe Generale has introduced the Turbo Life in the Netherlands. The new series turbo 2.0, which is issued via the bank's SG Issuer subsidiary, is based on the same principles as that of the classic turbo with one main difference: once the stop loss level is reached or exceeded the product is not deactivated.

"We always look to bring new products or features to the market," said Ernst Gevaerts (pictured), head of cross asset retail distribution sales for the Netherlands at the French bank.

"We have listened to turbo investors who have expressed frustration when their position is ended as a result of an early knockout, while, afterwards, the position has recovered and they cannot benefit from this recovery unless they have quickly bought a new product."

Investors now no longer need to buy a replacement as, within 15 minutes of reaching its stop loss level, the product goes live again with adapted characteristics, according to Gevaerts. "There will be an adjustment of the product features (funding level, stop loss level, parity, leverage), after which it can be traded again," said Gevaerts. "In particular, the funding level is reduced (in the long variant) in such a way that the leverage remains virtually the same at the level at issue. The costs of the adjustment amounts to 0.1%."

Products in the Turbo Life series do not have a fixed maturity date and investors can remain invested as long as they think it is necessary for their strategy to play out, providing the financing level is not reached, according to Gevaerts. "There is no end date, however, there will a maximum amount of restrike events, because, if a restrike occurs a couple of times, the value of the Turbo Life will decrease."

Although new to the Netherlands, the Turbo Life is not a completely new product, after first being launched by Societe Generale in France in July last year.

There are 20 Turbos Life available to investors in the Netherlands, equally split between products linked to the AEX benchmark index and products linked to the Dax. However, the bank is planning to launch products based on the most popular Dutch shares as well, according to Gevaerts.

SG has been active in the Dutch market for leverage products since July 2016, when it launched daily bull and bear certificates, a product with an airbag mechanism instead of a stop-loss level and which is suited to day trading. In December 2016, the French bank introduced its second product line, the SG Turbo Best, which has no fixed maturity date and differs from regular turbos in the sense that the financing level and stop-loss level is the same.

The products are listed on Euronext Amsterdam and can be bought or sold via brokers and banks. Under normal circumstances, SG ensures the liquidity on every trading day between the hours of 8am and 6.30pm.