More coverage on SRP Europe conference panels have arrived, while Eusipa’s latest report revealed increased sales of leveraged products in Europe.

As equity volatility rose over President Trump’s trade policies, RBC Capital Markets is seeking to push its quantitative investment strategies (QIS) offering following the launch of the VolMax indices, its first high volatility strategy co-developed with Bloomberg Indices.

New discussions on lower volatility indices with broker-dealers and registered investment advisors (RIAs) have been set off as the demand for VolMax continues, according to Matthew Swingle, director, equity derivatives sales at the Canadian bank.

If investors do not want to have direct exposure to the stock market and do not want to put everything into money market funds, structured products are almost necessarily - Thomas Wulf

Over the past two months, RBC Capital Markets has collected US$10.1m notional from registered structured notes on the Bloomberg US Large Cap VolMax and Bloomberg US Small Cap VolMax5 through reverse inquires with a typical five-year tenor. The first calendar offering for retail was traded on 31 March.

Looking at Europe, sales of leverage products – consisting of warrants, knock-out warrants, and factor warrants –  amounted to €24 billion in Q4 2024, up 30% compared to the prior year’s quarter, according to the latest update from the European Structured Investment Products Association (Eusipa) and its member associations.

“If investors do not want to have direct exposure to the stock market and do not want to put everything into money market funds, structured products are almost necessarily the answer as they provide a buffer against a share or index price drop, and they also offer a certain adjustable capital protection level,” Thomas Wulf, secretary general, Eusipa, told SRP.

Dutch distributor Van Lanschot Kempen (VLK) won the award for ‘Best Performance, Benelux’, ‘Best Distributor, The Netherlands’, and ‘Best Performance, The Netherlands’, at this year's SRP Europe awards, as it reported an improved result for its structured products activities, which registered a 6.7-fold increase year-on-year.

Irish distributor Davy was awarded ‘Best Distributor, Ireland’ and ‘Best Performance, Ireland’. Mark Caffrey, director of structured solutions for the firm, spoke about clients’ product preferences in those linked to mainstream equity indices, including the Eurostoxx 50 and Topix.

In SRP’s latest market review for the UK, some 67 publicly offered structured products with an estimated £102m (US$132m) in sales in February, down 30% compared to the prior year’s period. 40 products that sold around £47m at inception autocalled during the month. Their average annualised return was 8.30%, higher than the 7.05% p.a. seen a year ago.

Also, the SRP Europe conference provided further insights into the new UK Consumer Composite Investments (CCI) scheme which sparked discussions on cost disclosure, best practices and current challenges to meet the new requirements. Industry participants also discussed the latest progress on the EU’s Retail Investment Strategy (RIS) and the sustainability of ESG-linked structured products in view of the latest European Securities and Markets Authority (Esma) guidelines.

Csaba Koppany, head of risk managed investments (RMI) solutions management at Schroders highlighted in the funds of structured products panel session that “usually investors buy one to three structured notes in their portfolio […] if for the same capital allocation, they can get exposure to 30 to 40 structure notes, it genuinely benefits diversification.”

In the hedging side of things, the adoption of quantitative investment strategies (QIS) has shifted from pure systematic call options and put buying programmes to a broader approach focusing on asset allocation and diversification, said Jagadish Chalasani, co-head of linear FICC and cross-asset strategic indices at J.P. Morgan in the QIS-focused panel.

In Asia, major Korean securities houses – including Mirae Asset Securities, Samsung, Korea Investment and Securities, KB and Shinha – have reported robust profits in 2024.

As part of wealth management financial products, Mirae Asset Securities’ equity-linked securities (ELS) and derivative-linked securities (DLS) revenue jumped seven percent to KRW15.5 billion. The Seoul-based securities house said it will expand ELS product supplies beyond domestic markets, such as Taiwan, Europe, and Japan, following its expectation of decreased issuance on DLS.

Among people moves, David Hansson, managing director and head of investment & advice for Southeast Asia at J.P. Morgan Private Bank, has parted ways with the US bank. Hansson moved to the US bank’s buy-side business in 2019 and relocated to Singapore to take on his new position after 14 years in the investment bank where his last position was managing director, head of third-party distribution for Asia and Europe, Middle East & Africa (Emea) in Hong Kong.

Image: MaximusDn/Adobe Stock.

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