Vontobel rolls out Yield Matrix in Switzerland’s secondary market

Vontobel has introduced Yield Matrix to its Defender and Multi Defender Vontis (barrier reverse convertible) product range, which was been the most popular product type on the Swiss market in mid-April. The Yield Matrix is a new functionality that offers clients a quick and easy way to find the maximum yield by selecting different elements of a products such as underlying, barrier, currency and term.

This tool is the only one of its kind in the market, and provides investors with a transparent overview of available yield opportunities for (multi-) barrier reverse convertibles in the secondary market, according to Eric Blattmann (pictured), head of public distribution financial products at Vontobel. “Investors can now discover products of interest to them which they would not have found in this easy and convenient way,” he said.

By using the filter criteria, investors can easily narrow down yield opportunities in the secondary market to a selection of products that fits their needs, said Blattmann. There are 171 underlyings and 5,555 multi and barrier reverse convertibles offered on Vontobel’s Derinet.

Although the Yield Matrix tool is only available to Swiss investors and only for (multi-) barrier reverse convertibles, it is “theoretically expandable” and the bank is currently working on implementing the tool also in Germany, said Blattmann. “Because the German market is different from the Swiss market – in Germany discount and bonus certificates are the most popular products – we will need to adapt the tool to the German market,” Blattmann said.

Transparency has been the leading topic during the last couple of years in Germany and Switzerland, where issuers have made significant efforts to improve investor understanding of structured products. The issuer estimated value (IEV) introduced in Germany and the disclosure of distribution fees and expected issuer margin started by Vontobel in Switzerland are among last year’s major developments.

The risk monitor tool developed by Deutscher Derivate Verband (DDV) in cooperation with EDG and UBS, and the barrier-hit-risk developed by Citi and SmarTra.de are all helping to bring transparency to the market. “Everything that enhances transparency, convenience and understanding is very beneficial,” said Blattmann. “I see a trend developing strongly towards promoting transparency and understanding," said Blattmann. "I think this is a very important development.”