The focus was very much on the French market this week were structured products paid out an average annual coupon of 8.4% in 2023.
Ninety-eight percent of structured products that matured or autocalled in France during 2023 provided a positive return, according to research conducted by SRP.
The average annualised return reached 8.4% in 2023 – 1.5 percentage points higher compared to 2022
SRP reviewed over 3,200 redeemed products, of which three percent reached their organic maturity date and 97% triggered early maturity during the period. Index-linked products accounted for 59% of the maturities; products linked to a single name represented 20% of the total while worst-of option stock baskets represented 18%.
The average annualised return reached 8.4% in 2023 – 1.5 percentage points higher compared to 2022.
Also in France, Federal Finance Gestion continued its strategy of co-developing ESG and thematic indices for its structured funds.
After winning the ‘Index of the Year’ award at SRP Europe 2024 for the S&P France 40 Paris-Aligned Transition ESG 5% Decrement Index, which was created in collaboration with S&P Dow Jones Indices, the investment manager has now partnered with Solactive to launch the Solactive Transatlantique Planete Index, which was developed based on the work and expertise of Federal Finance’s cross asset solutions and ESG teams.
The first fund linked to the index is Autofocus Ambition Planete Juillet 2024, a nine-year autocall for which the marketing campaign started on 13 May. It offers a potential annual coupon of seven percent and has a European soft capital protection barrier of 60%.
More French product news came courtesy of Goldman Sachs and UBS who both issued autocallables targeting basic resources by utilising the Morningstar Eurozone 30 Basic Resources Banks Energy Decrement 50 GR EUR Index and Bloomberg Europe DM Top 30 Basic Resources Decrement 50 Points Index, respectively.
In people news, France Mayer was appointed retail investor relations and protection director at the Autorité des Marchés Financiers (AMF). Mayer, who will also join the French regulator’s executive committee, started her new role on 1 June. She reports to AMF chair Marie-Anne Barbat-Layani. Mayer began her career at Société Générale, holding successive operational and management positions in the secondary trading team for structured products and complex derivatives.
In Austria, the outstanding volume for structured products reached €15.3 billion (US$16.5 billion) in April 2024 – up €162m or 1.1% compared to March, according to latest figures from the Austrian certificate association (Zertifikate Forum Austria or ZFA).
The increase represents a historic high as Austrian retail investors have never had such a high volume of capital invested in structured certificates, the association stated.
Meanwhile, in neighbouring Switzerland, ERIYA AG, an investment services startup founded in 2023, is seeking to leverage structured products to add value to investors’ portfolios.
In an exclusive interview, CEO Sandro Schmidlin told SRP the current focus is on growing the company's client base and expanding its headcount organically.
"The primary goal has to be client loyalty via exceptional service, competitive pricing and a personal devotion to every relationship," he said.
This week’s market review focused on Hong Kong SAR, where issuance of derivative warrants and callable bull/bear contracts (CBBCs) rebounded in April. The former increased from 494 in March to 599 in April while issuance of CBBCs was also up: from 1,584 to 1,764. Average daily turnover of these products, however, remained flat.
Last Tuesday (28 May), the US markets opened with T+1 settlement following more than three years of preparation, after Canada, Mexico and Argentina implemented the change the day before when it was a public holiday in the US.
Banks and brokers will face roughly 80% less time to manage cross-border settlements under T+1 due to added complexity of time-zone and FX challenges, noted Swift, which owns Swift Code. For new issuances of structured notes, issuers are sticking with T+2 or T+3, which are still permitted.
SRP continued its coverage of its Asia Pacific conference, with this week’s focus on portfolio hedging and the increase in systematic volatility selling that has been profitable, based on assets under management in recent years.
The one place where there has been an increase in hedging was by using very short-dated options, such as zero days to expiration options Optiver’s Karinvir Gill told the audience in Singapore.
Image: Mathieu/Adobe Stock.
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