Dutch retail investors are showing an increased appetite for listed certificates with 50 such products striking in August, according to SRP data.

The market for capped bonus and classic bonus certificates is definitely growing in the Netherlands, according to Christophe Cox, vice president, public distribution, equity markets and commodities, Belgium and the Netherlands, Commerzbank. "Investors are getting more familiar with these products," said Cox. "They understand the products and know how they can be traded," said Cox, adding that the bank also put a lot of effort in promoting these products via, among other, seminars, online webinars and "events we organise with our partners in the Netherlands".

In the Netherlands it is easy to choose a product that exactly fits your needs - the approach of many analysts and journalists alike, is still that structured products are created, one at a time, and then sold, according to Cox.

"Our aim is to have dozens of products outstanding on the market, as we do now, on many different underlyings, and we want investors to be able to choose the product that corresponds with his/her expectation on, for example, a share, or a product that corresponds to a certain risk/return ratio," said Cox. "Say, a possible return of 7 to 8% with a certain risk attached such as a barrier of 70 or 80%."

Commerzbank issued 32 capped bonus certificates in August, with a further ten products brought to market by BNP Paribas. The certificates - also known as 'Rendement' certificates in the Netherlands - have a duration of between 10 and 13 months and are predominately linked to Dutch and Belgian shares, with one product linked to the German Dax index. The German bank also launched eight discount certificates, linked to the AEX Index and the Eurostoxx 50, respectively.

Discounts, together with bonus and capped bonus certificates, feature heavily in Bufferfund, an open-ended investment fund that uses structured products. In its interim report, the fund reported assets under management increased by 43% in the first six months of 2018, from €30.2m end-December 2017 to €43.2m at the end of June. "Almost the entire growth was due to the influx of new and existing participants," said Marcel Tak, fund manager, statutory director and responsible for investment research, at Bufferfund.

Bufferfund mainly invests in (capped) bonus certificates and discount certificates linked to an equity index which are listed on the exchanges of Frankfurt and Stuttgart. "At the moment that is the Eurostoxx 50, but other indices are certainly not excluded," said Tak.

Products that matured during the month included Wilgenhaege Capital Markets' Aegon Click 15.5% which matured early after one-year, returning 115.5%. Exactly the same return was provided by Kempen's VL Premie Note Eurozone 16-18 - albeit over two-years. The product was linked to the Eurostoxx 50 and despite its positive performance, the merchant bank did not launch a successor to the note, according to Marcel Pronk, structured products distribution, Kempen.

"This product had been trading close to the maximum redemption in the secondary market for some time," said Pronk. "As a result, many investors sold the note prematurely and instead rolled into other products, including the recently issued Trigger Notes. So at maturity we did not think there was a need to put a follow up in the market."

The full Dutch market review for August will appear shortly.

Image credit: Vecteezy.com

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