One of our most read articles this week covers the Eurostoxx 50 index, which we found offers a higher dividend yield than US total return indices at the expense of lower upside participation rates embedded in structured products.

According to SRP data, with a dividend yield of 6.08%, the Eurostoxx 50 income is superior to the dividend yield of the Russell 2000, S&P 500 and DJ Industrial Average Index. In accordance with what we have already argued, value oriented underlyings characterised by lower P/B ratios convey a higher dividend yield.

Hence, the Eurostoxx 50 and Russell 2000 P/B ratios (1.50 and 1.86) compensate with higher dividend yields, whereas the S&P 500 and DJ Industrial Average tend to fall slightly more into the overvalued territory. The latter’s dividend yields are inferior to the preceding two indices.

We find that structured products linked to the Eurostoxx 50 have ensured on average a 174.14% upside participation, while the participation rate of products linked to the S&P 500, Russell 2000, and DJ Industrial Average Index show an average of 141.99%, 149.41%, and 145.62% upward potential, respectively.

Staying in the index world, the Moscow Exchange has launched the Moscow Real Estate DomClick Index based on data from DomClick, part of the Sberbank ecosystem and based on mortgage transactions from the Russian bank. The index tracks the weighted average price per square meter of residential space across the city of Moscow - includes apartments in multi-story apartment buildings and excludes luxury real estate to avoid price misrepresentation. The index methodology as well as amendments and supplements were developed based on recommendations from the Expert Council on Real Estate Market comprising representatives of the Moscow Exchange, Sberbank, DomClick, DOM.RF, Lomonosov Moscow State University and the Financial University of the Russian government.

Jean Park, the former head of client coverage, North America at S&P Dow Jones Indices, has joined index specialist firm MerQube as head of business development in New York. He will join former colleagues Vinit Srivastava, co-founder and chief executive officer of the index firm, and former global head of strategy and volatility at S&P Dow Jones Indices, and Keith Loggie, co-founder and chief operating officer and previously chair of the S&P 500 Index committee and global head of index research and design at S&P Dow Jones Indices.

Revolving doors continue at Vontobel, with the Swiss asset manager seeing one former executive emerge at structured investment specialist firm Investment Design & Distribution (Idad). Ben Board, the former head of financial products sales UK, Ireland, Middle East & South Africa, at Vontobel, has resurfaced as head of strategic partnerships at Idad, after leaving Vontobel in September 2019.

US structured note fintech platform Halo Investing has teamed up with software provider Riskalyze to facilitate expanded access to structured notes and mitigate volatility.

The upcoming expansion of Halo’s structured notes offering through the data provided by Riskalyze will add coverage to a large volume of notes directly within the software. It responds to structured notes being recognised as the vehicle of choice by a growing number of financial advisers and independent registered investment advisers, though previously reserved for a more elite group of clients, according to co-founder and chief executive officer Biju Kulathakal.

HSBC has been business in its Asia Pacific markets, launching in Singapore its first structured note tied to the performance of the AI Powered US Equity 5 Index (AiPEX5). The index was made available for two weeks to investors with investible assets of at least SG$2m (US$1.46m) within its retail banking business. The note is the first structure in the country to track the US Equity Index (AiPEX) family, which was launched in May as ‘the market’s first to use artificial intelligence (AI) as a method for equity investing’.

In Hong Kong, the banking giant will issue its first structured deposit linked to the performance of the HSBC VantageZ Index (USD) Excess Return as soon as relevant training has been completed. The two-year structure will deploy a shark fin as payoff with a quarterly evaluation basis and an uncapped return. The index, launched on 10 June, allocates across 19 assets composed of 18 ETFs and a cash index. The assets belong to seven groups classified as US equities, developed equities (ex US), China equities, emerging equities, bonds, real assets and cash.

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