In a week marked by the platinum jubilee celebrations, there was good news for autocalls on the UK flagship index.
Some 1,250 FTSE 100-linked autocall structures have matured in the UK retail market with all but eight of the products providing a gain to investors, according to the Structured Product Autocall Review 2022 published by Lowes Financial Management.
The eight products failing to deliver gains were caught by the fallout of the financial crisis and matured returning only the capital invested.
It is a fact that no maturing FTSE 100 capital-at-risk autocall plan has failed to reward investors with a gain since April 2013 - Josh Mayne, Lowes
The average annualised return of the 1,250 maturities in the UK market to date was 7.9%.
“It is a fact that no maturing FTSE 100 capital-at-risk autocall plan has failed to reward investors with a gain since April 2013, representing almost a decade of consistent positive performances,” said Josh Mayne, structured product technician at Lowes.
On the other side of the channel, Euronext launched a futures contract on the Cac 40 ESG index, the ESG version of Cac 40, the French national benchmark.
Supported by BNP Paribas, DRW and Société Générale as market makers, the contract will enable market participants to manage and hedge ESG portfolios efficiently and in compliance with ESG principles, and to lower the cost of trading.
ESG indices are at the core of the exchange’s strategy, according to Fabrice Rahmouni, head of Euronext index business, in an interview with SRP.
Last year, Euronext moved forward on its plans with the decision to provide ESG alternatives of all its blue-chip indices, responding to the growing demand for sustainable investment tools from investors and the wider market.
In the arrivals & departures section, Eric Jungers and Jean-Francois Mastrangelo were named co-heads of equities & equity derivatives (EQD) for Apac at Société Générale. They replace Timothée Bousser who is exiting the French bank after 17 years in charge of the Apac business.
Effective from 1 July, the pair will report to Jérome Niddam, Apac head of global markets, with a functional reporting line to Alexandre Fleury, global co-head of global markets, alongside Sylvain Cartier.
On the product side, funds of structured products had plenty to deal with in April. Volatility spiked as investors reacted to persistent inflation, interest rates continued to rise and then there was the ongoing war in Ukraine.
In this climate, the Finanzlab Multi Index Fund, which celebrated its first six months of existence on 20 April, proved its resilience with a net asset value of CHF 97.87 on 29 April, down only 1.06% from the previous month.
Some 95.23% of the fund’s assets are invested in a portfolio of six structured products, including an Express Certificate on a basket comprising Eurostoxx 50, S&P 500, and SMI that is issued via Raiffeisen Switzerland. It offers an annual coupon of 6.5% and has an American barrier of 50%. Other issuers include Aargauische Kantonalbank (AKB), Banque Internationale à Luxembourg (BIL), EFG, Postfinance, and Vontobel.
“Despite sharply declining equity indices and high volatility, the cumulative advantage of very low barriers and the daily collection of coupons allowed the fund to post an impressive relative performance,” said Vincent Bonnard, founding partner, Finanzlab.
Atlantic House Defined Returns Fund, the largest fund out there with assets of £1.4 billion, fell one percent during April. Although nearly two-thirds of its investments are exposed to the US market, which has fallen 14% year-to-date, most of these positions are far enough above their positive return barriers such that moves in that market, up or down, are still having only a small effect.
Ballybunion Insignia Defined Returns Fund, which is 100% invested in euro-denominated step-down autocalls, was another fund that suffered from the equity markets sell off in April. Its net asset value fell by 4.5% during the month.
The fund topped up positions in three notes, taking advantage of lower prices, and thus averaging down its entry points in aggregate on these holdings.
Image: Edson Rosas/Unsplash.