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Maturities of the month - 29/05/2024

April recorded 61 structured product maturities, no doubt an impressive monthly total but somewhat unsurprising considering the FTSE 100 opened at 7,952.62 and closed out April at 8,144.13. Given that over 80% of the maturities were FTSE 100 (or FTSE CSDI*) linked, conditions were ideal for maturing autocalls. Four of the month’s maturities were fixed term contracts that were always destined to mature then but the rest were all autocalls or income plans with autocall observations – all kicking out early due to elevated stock market levels.

The average annualised return for capital at risk autocalls was 7.32%, over an average duration of 1.91 years. FTSE 100 or FTSE CSDI only autocalls realised just shy of this with 7.20% over an average term of 1.94 years.

Looking at some highlighted maturities of last month:

April 2024 best performing structured product maturities by annualised return

Provider Plan Name Index Link Maximum term (years) Coupon Counterparty Index Movement % Final Gain % Annualised Return
Mariana 10:10 Plan April 2022 (Option 3) FTSE CSDI 10 11.40% Morgan Stanley & Co. International 6.24 22.80 10.80%
MB Structured Investments UK Growth Kick Out Plan April 2022 FTSE 100 5 9.50% Barclays 4.83 19.00 9.05%
Walker Crips UK Annual Kick-out Plan (GS156) FTSE 100 7 8.50% Goldman Sachs 6.26 17.00 8.15%
Meteor FTSE Step Down Kick Out Plan April 2022 - Option 1 FTSE 100 7 7.00% Morgan Stanley & Co. International 3.45 14.00 6.76%

In all cases of the above we see that the final gain outperformed the index movements, and with each of the above maturities all having an actual term length of just two years, the annualised return achieved would have ensured that the structures would’ve been more beneficial to hold than the underlying index.

At the time of writing the FTSE 100 sits above 8,200, meaning May will be another month of ample maturities. Looking at currently investing in FTSE linked autocalls say, who is to know where the stock market goes from here, thus impacting potential future maturities. With over 20 odd years of reoccurring rangebound motion of the FTSE it would be foolish to say we have reached escape velocity and will continue on an upward trend, but the same applies to saying that we can expect another decade of ‘typical’ FTSE movement. Common sense should prevail – longer maximum durations and sensible counterparty exposure are key ingredients for success in structured products.

To see currently available plans on offer from the providers above as well as the latest issue of the 10:10 Plan July 2024 please visit our current products page here.

* The FTSE CSDI is very highly correlated to the FTSE 100 Index, and may therefore be expected to perform in a similar way to the FTSE 100 Index, although it would be expected to slightly underperform the latter if the total dividend yield transpires to be less than 3.5%.

Structured investments put capital at risk.

Past performance is not indicative of future results.

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