There has been an increasing use the decrement overlay in single stock and stock basket underlyings in Canada this year.
As decrement indices have gained significant popularity in this market since the onset of Covid-19, the underlying components have expanded to single stock, stock baskets and even exchange-traded funds (ETFs) expanding the pool of favoured thematic indices. For the relatively newcomers, some issuers still classify them as ‘indices’ with an index sponsor as calculating agent such as Solactive, Euronext, MerQube, FTSE and Stoxx while some like Bank of Montreal have internalised the ca