Thematic and decrement indices remain a focus for innovation for product providers and investors.

Thematic and decrement indices remain a focus for innovation for product providers and investors.

SRP has launched the SRP Thematic/Decrement indices report.

Thematic indices track megatrends and concepts that are likely to shape the future of economies and societies in the decades to come. They have established themselves in the structured products market, increasing their issuance and sales volumes in the period under review (2019-2022).

The SRP Thematic/Decrement indices report is the third of four chapters on indices that will be released throughout the year

The decrement overlay is represented as a constant markdown or ‘decrement’ applied to the index. It has become an effective feature of indices used in structured products as they remove most of the dividend risk and offer higher coupons to investors. Decrement indices have significantly increased their market share across markets, but specifically in France, since early 2020, while their methodology has been applied to different index strategies – thematic, ESG, single stock underlyings.

The SRP Thematic/Decrement indices report is the third of four chapters on indices that will be released throughout the year. Previously, the ESG and Market Cap/Industry Sector chapters were published.

Scope

The SRP Thematic/Decrement indices report aims to show the evolution of the landscape between 2019 and 2022 and provide insight on issuance and sales activity around these index categories in the structured products market.

The report also includes insight and thought leadership with a global overview of market activities and highlights from the main suppliers of Thematic/Decrement indices to the structured products market.

Key points

  • Global Overview & recent developments
  • Four years of public distribution structured products data, including the top indices/index providers, main thematics, breakdown by region, and by synthetic dividend
  • Exclusive interviews with some of the main index providers in this segment including FTSE Russell, MerQube, Morningstar, MSCI, and Qontigo

The SRP Thematic/Decrement indices report, as well as the ESG and Market Cap/Industry sector chapters of the report are available for download here.