This week, we look at the latest development across the globe, featuring the launch of SRP Wrapper Guide Asia Pacific 2024 and three exclusive quarterly market reviews.

In South Korea, the saga of equity-linked securities (ELS) mis-selling continues to evolve as Standard Chartered Bank has allocated US$100m to compensate the investors who have taken a significant loss from the ELS tied to the Hang Seng China Enterprises (HSCEI). 

A trading desk at Goldman Sachs noted that the key level of the China equity benchmark lied in 7,000, 'where a large chunk of knockout barriers for Korean structured products is concentrated'. The HSCEI shed 0.03% closing at 6,686.13 today (28 May) after reaching a monthly-high at 6,964.99 on 20 May.

Across the border, the number of structured deposit issuances in China has increased in April YoY, with the XAU/USD and EUR/USD product issuance doubling. The Nikkei 225 Index is also spotted through four structured deposits issued by HSBC China, our China Market Review, April 2024 shows.

In the second-part of our Spotlight on Asia Pacific (Apac) with a focus on payoffs, autocallable yield enhancement products have reached more than half of the market share by estimated sales in the region in 2023. The first part centring on underlying sector trends can be found here.

At the same time, the SRP Wrapper Guide Asia Pacific 2024 prepared by the SRP editorial team is now available for download. It provides an overview of wrappers used to deliver structured products to retail investors in several major markets, across both over-the-counter (OTC) and listed venues.

The SRP Structured Investments Guide is part of our educational initiatives to support and promote structured products as efficient instruments to provide access to markets. The previous one for Europe is available here.

In the US, Lincoln Financial has launched a registered index-linked annuity (Rila) linked to an actively managed exchange-traded fund (ETF), in a first for the US market.

Lincoln Level Advantage 2 (LLA2) is designed to bring investors more protection and growth building on the six-year-old first generation LLA, which has amassed US$942m sales for the first quarter of the year and US$4.3 billion for 2023. 

The Capital Group Global Growth Equity ETF and the Capital Group Growth ETF are made available for LLA2’s index accounts, marking the first Rila tracking actively managed ETFs in the US, according to the Pennsylvania-based insurer.

For the fourth consecutive quarter, Rila posted record sales with an increase of 39% in the first quarter of the year to US$14.5 billion, according to results from Limra’s U.S. Individual Annuity Sales Survey. Total US annuity sales were US$106.7 billion for the three months, up 13% YoY. 

In the indexed universal life (IUL) space, the premium increased four percent to US$930m in the first quarter of 2024 YoY, forming 25% of the total new annualized premium for the US individual life insurance, according to Limra’s preliminary U.S. Life Insurance Sales Survey.

We also took a peak at how indexed annuity business have fared at Equitable, Brighthouse and Corebridge in the first quarter through their latest earnings reports.

In the US structured note market, the demand for exchange-traded fund (ETF) underliers remains strong, according to the latest analysis based on StructrPro. The total market share linked to ETFs, which are among the top five underlying types, is 5.51% year-to-date, compared to 6.83% for 2023.

Meanwhile, the country's registered note market saw a robust April where three out of the top five best-selling products were issued by Canadian banks in partnership with BofA, according to our US market review, April 2024.

In Europe, Japan's Nomura has capitalised on repacked structured notes in an attempt to generate alpha for insurance clients, which have gained traction over the last two years, according to the Japanese bank.

In France, Crédit Commercial de France (CCF) has signed an agreement to distribute structured products to retail investors issued by Morgan Stanley, as the commercial bank aims to support clients in 'managing their accounts, projects and wealth by partnering with top market players'.

Our UK Market Review, April 2024 shows that products in the UK linked to a single equity-index captured 85% market share, up 18 percentage points YoY. There're 65 products worth an estimated £115m (US$146m) with strike dates in April – on par by sales volumes compared to March, but down 27% YoY.

In Germany, index technology provider BITA continues to advance its plans to become a key player in the market by leveraging its infrastructure and entering the traditional indexing market with a focus on customisation.

Additionally, this week's product wrap focuses on a product on the paper of Natixis Structured Issuance SA linked to ESG healthcare sector and an climate change effort by DekaBank.

On the digital assets side, Switzerland's Finanzlab has reported 39.6% growth in performance for its actively managed certificate (AMC) CryptoVol since its launch on 2 February. The boutique, specialising in the design, selection and brokerage of custom structured products, has partnered with Marex to target professional investors seeking crypto exposure in their portfolios.

Image: Metamorworks/Adobe Stock.

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