Market cap and sector indices remain the dominant indices in the structured products market with the S&P 500, Eurostoxx 50 and Nikkei 225 driving most of the sales across jurisdictions over the last two years.
Although market cap indexes were never designed to be underlying for this type of investment product, they have maintained their appeal due to their liquidity and simplicity, which allows for competitive pricing and coupons. Europe has seen a rapid adoption of ESG overlays, and clients are quick to incorporate ESG considerations into their index exposures - Stephane Mattatia “Standard indexes are also used as a starting point to develop and showcase the performance of complex algorithm