SPACs get hot; ZKB joins deriBX segment; RILAS on the up; new ETF portfolio solutions launched
Goldman Sachs Group has sold ‘a few structured notes’ to clients seeking to gain geared exposure to special purpose acquisition companies (SPACs), to capitalise on increasing activity on the market trend, SRP has learnt.
The two-year SPAC-linked structured notes offer a payout referenced to a basket of discounted SPACs and have been issued under the Rule 144A which provide many structured note offerings with exemption from the Financial Industry Regulatory Authority's (Finra) Rule 5123, relating to private placements and the requirement for registered documentation.
It is understood Goldman does not charge a management fee for the notes but offers investors financing to participate in the product and keeps some of the returns on the SPAC stocks, depending on how well they perform. The new SPAC notes are being offered by a desk in the sales and trading arm of Goldman Sachs' global markets division, rather than investment banking unit.
The SPAC market continues to grow at a speed – its size reached US$137.4 billion at the end of October.
Goldman Sachs declined to comment on the details of the product.
ZKB debuts as warrant issuer on BX Swiss deriBX
BX Swiss has expanded the pool of issuers in its structured products segment deriBX with the addition of Zürcher Kantonalbank as an issuer of products on BX Swiss.
Zürcher Kantonalbank, a top 10 Swiss provider of structured products, according to SRP, issued its first structured warrant certificates on the exchange at the beginning of November 2021. The underlying universe includes a broad range of Swiss bluechip companies
Andy-Christian Ranti, head structured products trading at Zürcher Kantonalbank, said the underlying offering will be continuously expanded for investors to profit ‘from augmented trading access as well as an increased product offering’.
The bank has more than 1,200 live products in the Swiss market with an estimated value of US$313m. The products were mostly offered via reverse convertible, worst of and callable structures linked to baskets of stocks and indices. Year to date, Zürcher Kantonalbank has issued 249 products worth an estimated US$45.7m.
SIMON adds partner in push for marketplace expansion
The US multi-dealer platform has partnered with enterprise software solutions provider +Subscribe to launch an alternative investment fund marketplace, which would deliver a full suite of investment offerings from established asset managers.
The marketplace will be powered by +Subscribe’s electronic subscription document technology and strives to allow financial advisors to centralise their activity across direct fund and feeder fund investments.
The fund marketplace aims to equip clients with product analytics, education, and lifecycle management for both registered and private funds. It will also be available to more than 100,000 financial professionals from 50 wealth management firms that already have access to the Simon platform.
+Subscribe’s technology is employed on a global scale by more than 5,000 institutional investors, 1,200 private funds, and 300 service providers such as fund formation law firms, fund administrators, and asset custodians.
US RILA sales up 80% YoY, FIAs catch up
Total preliminary US annuity sales were US$62.2 billion in the third quarter, up 12% from third quarter 2020. Year-to-date, annuity sales increased 19% to US$191.4 billion, representing the highest sales in the first nine months since 2008, according to the latest Secure Retirement Institute (SRI) US Individual Annuity Sales Survey.
Registered index-linked annuity (RILA) sales were US$9.2 billion, up 47% from third quarter 2020. For the first three quarters of 2021, RILA sales were US$28.4 billion; 81% higher than prior year.
‘Third quarter RILA sales dipped from the record-level sales recorded in the second quarter. Improving interest rates and lower volatility have likely made fixed indexed annuity products more attractive to investors seeking greater protection and yield,’ said Todd Giesing, assistant vice president, SRI Annuity Research. ‘There are some big VA carriers entering the market with new products this quarter. We’ll have to see if this expands the RILA market further or shifts market share from existing carriers.’
Total fixed annuity sales were US$31.5 billion, down one percent from third quarter 2020 results. Year-to-date, total fixed annuities grew 10% to US$98 billion.
Fixed indexed annuity (FIA) sales grew 30% in the second quarter to US$17.1 billion — the highest quarterly sales in two years. FIA sales were US$47.1 billion in the first nine months, up 14% from the previous year.
‘Product innovation around cap rates and steady interest rates have helped drive FIA sales in the third quarter,’ Giesing said. ‘Concerns about inflation could boost FIA sales in the coming months as investors seek principal protection with greater investment growth to offset rising inflation. We expect FIA sales to surpass US$60 billion by year end.’
EQM rolls out asset-, risk-based ETF models
San Diego-based RIA firm EQM Capital has launched a new ETF Model Portfolio Solutions platform for investment advisors, wealth managers, and individual investors.
EQM Capital is launching a suite of Asset-Based and Risk-Based ETF models. While there are a host of ETF issuers with their own ETF Model Solutions, The firm’s new models have a ‘unique approach’ in that they are ‘provider agnostic’, and are focused instead on a ‘best of breed solution to optimally serve the investment needs of advisors and individual investors’.
EQM’s asset-based models are offered as modular building blocks for an asset allocation strategy while the risk-based models offer a ‘turnkey, multi-asset approach, aligned with client’s risk objectives’.
EQM Capital uses a proprietary process to identify the most qualified ETF’s suitable for inclusion in their ETF models - informed by EQM’s macro viewpoint, the ETF universe is quantitatively screened on a variety of factors and the ETF Models are optimized and aligned on a risk-reward basis. EQM Capital’s client risk assessments are powered by Riskalyze and also align with Riskalyze Risk Numbers.