Absa Bank, which is part of the Barclays group, has launched the second tranche, so far this year, of its Index Performa range of capital-guaranteed structured products.
"Investors and investment houses have stepped back from the complexity of investment product design that was seen as recently as last year," said Richard Ager, Barclays Capital's head of equity derivatives emerging markets structuring, at a recent Absa Capital structured products presentation. He suggested that the long- or short-term memory of traders is irrelevant, as implied market volatility levels are the issue: "Investors are looking to hedge their risk. Locally, while the short-term volatility level has come down, it's still at high levels, and the long-term view also remains relatively high."
Index Performa Plus 3 is a three-year capital-protected growth product linked to the performance of the FTSE/JSE Top 40 index. This capped-call strategy offers investors full participation in the upside of the underlying, capped at 52.5%. The product also offers a 7.5% pa coupon during the offer period, while the final level of the underlying index is averaged during the last six months of investment.
Index Performa Plus 3 is available to retail investors until 12 June. Minimum investment is R20,000 (€1,725).