Also, UK retail structured products deliver 7.2% on average in 2024, while Hong Kong regulator fines Hang Seng Bank over mis-selling.

While the shakeup of artificial intelligence (AI) stocks triggered by China’s DeepSeek launch sent shares of Nvidia tumbling 17% last Monday, SRP data shows that only a small portion of the structured products linked to the US chipmaker saw their protection barriers breached.

Live products linked to Nvidia are mostly autocalls, reverse convertibles and barrier reverse convertibles

Specifically, 59 products linked solely to Nvidia stock – 1.3% of the total – have breached their barriers since 27 January by 10% or more and 0.6% of that have breached their barrier by less than 10%. Live products linked to Nvidia are mostly autocalls, reverse convertibles and barrier reverse convertibles. Approximately 67% of the products, or 1,995, were 40% away or more from breaching their barriers.

Shifting to the S&P 500 Index, the Wall Street benchmark delivered significant value to direct investors in 2024 after achieving an annual growth of 23.8%, also reflected by record issuances and sales of structured products that year. Of the 6,783 structured products linked to the S&P 500 maturing in 2024, half saw their performance expire in the US market, according to SRP data. Around 2,063 maturities were capital-at-risk plans, delivering around an 7.73% average annualised return, while some 966 soft-protected products delivered a 9.8% average annualised return.

The New Year’s people moves rush continued with the wealth management arm of Bank of America having promoted John Pellegrini as sales head of market linked investments (MLIs) within its investment solutions group.

Toronto-based CI Global Asset Management launched the CI Structured Premium Yield Fund last Tuesday, an income solution designed to deliver the enhanced yields typically offered by structured notes. The CBOE S&P 500 PutWrite Index is reference asset, which tracks the value of a hypothetical portfolio of securities that yields a buffered exposure to S&P 500 stock returns.

In the European market, the latest Lowes Structured Products Annual Performance Review shows that the average annualised return of 669 maturities in the UK retail structured product market was 7.19% over an average term of under three years. The average annualised return for all maturing capital-at-risk plans came to 7.49% over an average term of 2.81 years while that for all structured deposits was 2.58% over an average term of 4.81 years.

SRP also reviewed how some of the biggest funds of structured products registered in the UK and Ireland performed in December 2024, including Levendi’s Thornbridge Defined Return Fund aims to maximise the chance of generating an average medium-term annual return of six percent above British pound  deposit rates.

Zooming in on market reviews, in Switzerland, sales of structured products surged 31% year-on-year in December to an estimated CHF5.365 billion (US$6.1 billion), while Belgium’s sales in Q4 2024 reached the highest levels since Q1 2015 as the country’s structured product providers launched a counter-offensive to recover the money they lost to a government bond one year ago.

Right before the Asian market headed to the Lunar New Year holiday last Wednesday, the Hong Kong Securities and Futures Commission (SFC) charged Hang Seng Bank with committing ‘serious regulatory failures’ in its sales process involving collective investment schemes (CIS) and derivative products including secondary structured notes which resulted in overcharging and inadequate disclosure between February 2014 to May 2023. The bank was fined HK$66.4m (US$8.5m) and compensated 388 clients impacted.

Meanwhile, China’s state-owned Cinda International Asset Management has introduced in Hong Kong SAR the first transferable tokenised repackaging notes on the Ethereum blockchain. Distributed by GF Securities (Hong Kong) Brokerage and Hash Blockchain, the first tokenised short-term asset-backed liquidity notes in the Asian financial hub aim to replicate a constant net asset value open-ended investment fund.

Image: Aditya Vyas/Unsplash.

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