Structured products

WHAT IS THIS? Structured products are investments that have multiple components. For retail investors, the most common form is a bond plus an option – these tend to be standardised, sold in small tickets and large volumes. Managing the risks of large structured products portfolios is one of the biggest challenges dealers face.

Volatility capped access to funds

ING Bank is offering Swedish investors a product that has the classic benefits of allowing access to an unusual and potentially risky underlying while changing its return profile. The product is based on the East Capital Russia Fund, giving local…

Dutch Trigger

Van Lanschot has issued five-year trigger notes based on the AEX index of the 25 most-traded Dutch stocks. The product offers a minimum of 10% per annum on potential early maturity, although capital is not protected if the 50% barrier is breached at the…

Counting the cost of counterparty risk

A few years ago no-one worried about counterparty credit risk. Then a year ago that was all anyone cared about. As markets begin to settle down, the shake-up could have longer-term implications for the structured products market. By John Ferry

Dividend growth

Dealers and hedge funds were hammered by sharp falls in dividends during late 2008 and early 2009. Since then, liquidity has recovered as a wider range of market participants take advantage of the dislocation. Mark Pengelly reports

The Lehman flip clause flap

The decision of a US bankruptcy court to void contractual provisions that shield investors from the credit risk of swap counterparties in structured finance deals has put the legal systems of England and the US on a collision course. It also has…

Retrospective: Avoiding the barriers

This JP Morgan product from November 2008 linked to a basket of four Asian indexes and promised a 2.05% quarterly income payment. In the event of a kickout, however, capital was placed at risk and the amount returned to investors would depend on the…

Market snapshot

Tim Mortimer of Future Value Consultants looks at the pricing issues for structured products in different markets and provides his trade of the month

Banca Fideuram focuses on clarity

Tightening spreads are making it more difficult for banks to factor protection into their products and although the market is stabilising, having protection and products they understand is still an important factor for Banca Fideuram’s customers. Clare…

Trading in the open

The development of the trading market for exchange-traded funds in Europe will depend on improvements in the reporting of off-exchange activity, though the wait for European legislation will be a long one. Further benefits would result from greater…

Keeping it in the family

US family offices control possibly the largest concentration of private family wealth in the world, so it is no surprise that creators of structured products are eyeing this space. But with the ultra-rich resembling small institutional investors more…

You need to sign in to use this feature. If you don’t have a Risk.net account, please register for a trial.

Sign in
You are currently on corporate access.

To use this feature you will need an individual account. If you have one already please sign in.

Sign in.

Alternatively you can request an individual account here