Returning issuers and distributors ensured a vastly improved UK structured products market in February, with volumes up on the year by 52% and issuance improved by 23% against the same month last year, according to SRP data. The increases are remarkable in a market that has been falling for the last six years.

Thirty-four out of the 48 products issued in February included an autocallable feature. The trend for autocalls, which has been ongoing since 2013, is expected to continue this year. Mariana Capital Investments has introduced 10-year autocall structured plans, which "offer investors both a market leading rate of return and enables participation in more autocall opportunities than a traditional kickout product offers," said Elton James (pictured), chief executive at Mariana.

The improvement is partly due to the return of distributors and also providers to the market, with the expected return of more largescale product providers that had pulled back following the introduction of the Retail Distribution Review by the UK Financial Conduct Authority.

As 2016 is "likely to continue to exhibit uncertain market conditions, and where interest rates are expected to remain low throughout, such research supports the view that all advisers should be considering structured products within their client's portfolios, as a way of helping meet their investment and savings needs," said Zak De Mariveles, chairman of the UK Structured Products Association.

UK structured products issuance

Feb 16

Jan 16

Jan to Feb 16

Jan to Feb 15

Products added

48 / £441m

23 / £108m

71 / £549m

77 / £495m

Products striking

18 / £80m

34 / £193m

52 / £273m

80 / £541m

Products matured

53 / £766m

53 / £816m

106 / £1,583m

151 / £1,960m

Source: Structuredretailproducts.com

February was dominated by Investec, which, after producing no new issues in January, came back with 15 new products, including two retirement, four deposit and five investment plans, raising £100m. Focus, Walker Crips and Mariana all issued six products each. Other active providers over the month included BNP Paribas, Hartmoor Financial, Mattioli Woods, Meteor and Reyker, each of which issued two products, raising a cumulative £249m, according to SRP data.

Standard Bank Offshore came back to the market after issuing its last products in the middle of 2015. The African bank offered investors two deposit plans in US dollars and UK sterling. The two growth products are linked to S&P Europe 350 Low Volatility and S&P 500 Low Volatility Index. The plans offer between 5% and 60% of market performance, with no cap.

Standard Bank also offered two growth products linked to the S&P/ASX 20. The Aussie participation notes offer a return based on 80% of the market performance, with no cap.

As the new financial year begins, more prominent issuers are planning to return, offering a further, substantial boost to supply, according to bankers.

Click here to view the full UK market review.

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