Amundi adapts structured product offering to match market environment

Amundi has posted an adjusted net income of €1.2 billion for 2022 – virtually stable compared to the previous year. Adjusted net income for the fourth quarter of 2022 stood at €303m, up 7.5% from Q3 2022.

The asset manager adapted its product range during 2022: the first half of the year saw inflows of €3 billion in equities under active management, particularly in thematic products, whereas in the second half, the adaptation of the structured product offering to match the new market environment (higher interest rates and flight to safety) meant Amundi could attract €2.7 billion, especially in the French and international networks, thanks to new EMTNs and formula funds.

Structured products are much better adapted to a final retail client - Valérie Baudson, Amundi

In France, positive inflows of €1.3 billion medium/long term (MLT) assets in the fourth quarter were primarily driven by structured products, but also by real assets and index management while there was solid business activity in Italy in fixed income products and in Spain in structured products.

In Q4, especially in the retail segment, the most important flows were not in money market but in structured products, according to Valérie Baudson (pictured), chief executive officer, Amundi.

‘Structured products are much better adapted to a final retail client,’ Baudson said, speaking during the presentation of the results on 8 February 2022. ‘My feeling is that in 2023 structured products will go on being an important part of the offer, at least for the beginning of the year, because retail clients will remain averse to risk in this still uncertain current environment […] we will go on delivering such solutions for networks in the near future, and we'll see how the year is going,’ she said.

The potential introduction of an EU inducement ban will have limited impact on structured products, added deputy CEO Nicolas Calcoen.

‘Typically, in our distribution contract, we have a general clause in case of significant change of regulation, according to which we must discuss in good faith to rebuild or preserve the general economic balance of the relationship,’ he said.

‘If [a ban on inducements] happens, and that's a big if, it will take some time to be implemented so the impact on existing contracts would be limited, if any,’ he said.

Amundi issued 47 structured products worth an estimated €5 billion in France during 2022 – up almost 22% by sales volume from 2021 when €4.1 billion was collected from 35 products.

In the first three quarters of the year, products were exclusively linked to single indices, including, among other, the Eurostoxx 50, Euronext France Social Decrement 3.75% Index, Euro iStoxx 50 Carbon Adaptation GR Decrement 5% Index and the Euronext CDP Environment France EW Decrement 5% Index.

However, in Q4, apart from 10 regular equity index-linked structures, the company also launched three interest-linked structures that were worth an estimated €1.1 billion. They were the first interest-linked products from Amundi since the launch of the SRP France database in 2004 and included Obligation LCL Select AV (Nov 2022), a 10-year unit-linked insurance plan which is callable from the end of the fifth year onwards.

Amundi’s assets under management (AuM) on 31 December 2022 totalled €1.9 trillion, a decline of 7.7%, due to the negative market effect (-€167 billion), and despite positive net inflows of €7 billion for the year.

The net inflows break down into €7.8 billion in MLT assets, €14 billion for joint ventures, and net outflows of -€14.9 billion in treasury products.

AuM for structured products was €31 billion compared to €34 billion at end-December 2021.

Passive management, which comprises exchange-traded funds (ETFs), exchange-traded commodities (ETCs), index funds and smart beta strategies, posted inflows of €13.8 billion, with the portion of funds replicating ESG indexes in the ETF range rising from 22% of the total range at end 2021 to 27% at end 2022, on track for the goal to reach 40% in 2025.

Click the link to read the Amundi Q4 and full year 2022 results and presentation.