Max Darer, Lowes Financial Management, 25/10/2023

Q3 saw another period of seemingly typical FTSE 100 rangebound movement, seeing closing highs and lows of 7,746.53 and 7,215.76 and ending the period just 1.07% above where it started. As dull as the FTSE was during these months, the average closing price was 7,511.26, proving to be appropriate conditions for many structured product maturities.

170 UK retail structured plans matured in Q3, 161 rewarding investors’ positively, 5 returning capital only and with 4 plans realising a loss. The 4 losses were three-stock linked plans that were all subject to the poor performance of Vodafone over their terms. 116 of the total maturities were linked solely to the FTSE 100 or FTSE CSDI with all but two returning a capital gain for investors. The two that did not realise a gain, returned invested capital in full. One of these was a deposit-based plan that did not expose investors to risk of loss. The other was a capital at risk FTSE 100 growth plan offering investors 5 times the growth in the index over the 6 years but at the end of term the FTSE 100 was 1% lower.  

 

Capital at risk

Deposit

Number of maturities

156

14

No. returning positively

151

10

No. returning capital only

1

4

No. realising a loss

4

0

Average term (years)

2.84

3.86

Avg. annualised returns

6.84%

2.15%

Avg. upper quartile

10.28%

4.05%

Avg. lower quartile

2.60%

0%

 

The best five performing plans by annualised returns are summarised as below.   

Provider

Counterparty

Index link

Maturity date

Investment term (years)

Final gain

Annualised return

Tempo

Société Générale

FTSE 100 EWFD

25/09/2023

3

47.70%

13.88%

Tempo

Société Générale

FTSE 100 EWFD

31/07/2023

3

46.20%

13.50%

Meteor

Citigroup

FTSE 150 EWDR

27/07/2023

1

12.25%

12.25%

Meteor

Citigroup

FTSE 100 & Euro Stoxx 50

14/07/2023

1

12.00%

12.00%

Walker Crips

Morgan Stanley

FTSE 100 & Euro Stoxx 50

19/07/2023

4

56.00%

11.75%

 

 

 

 

 

 

 

 

In terms of issuance, 205 plans were issued by nine different providers in Q3. The below chart shows the split of issued plans by providers in terms of the product type. Autocall plans made up 65% of issuance.

 

We can also see below the issuance in terms of the counterparty and the split between capital at risk and deposit-based plans, as well as four capital ‘protected’ plans from Barclays and Credit Agricole.

*by closing date

The mainstay of the UK retail structured product sector over the quarter was again capital at risk FTSE 100 (and FTSE CSDI) only autocalls, making up 45% of issued plans.

 

All data sourced from StructuredProductReview.com

 

Structured investments put capital at risk.

Past performance is not an indcator of future results.