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Milestone! 1,500 capital-at-risk autocall structured products mature - 21/11/2019

Geri Ryall, Lowes Financial Management

Over the last ten years the UK retail structured product sector has witnessed 1500 capital at risk, auto-call / kick-out maturities. Here, we take the opportunity to look at how these products fared.

The 1500 maturities, occurred between April 2009 and September 2019 and produced average annualised returns of 8.52% over an average term length of 2.09 years. 28 of the 1500 simply returned capital only with no gain and 23 plans matured with a loss, that leaves 1449 produced which matured with gains – 96.6% of all maturities!

The nature of all the plans in this milestone are similar in that they all put investors capital at risk (return of capital is linked to the performance of the underlying asset) and, they were all autocallable. Autocall structured products have grown significantly in terms of market dominance since their first introduction to the UK market and account for 68% of all products striking in 2019 so far.

Autocallable products are products that can automatically mature before their final observation date, if the underlying asset is at or above a pre-determined level. If early maturities are missed, the potential coupons accumulate year-on-year until the final observation date.

For the vast majority of the maturities the early maturity parameters were met meaning investors received their capital back, plus gains before the full term was up. The chart below shows how these maturities are distributed in terms of how long they were in force.

For 63 of the 1500 plans however, all early maturity opportunities were missed and at the final maturity date 12 of these triggered a positive maturity but 23 had breached their capital protection barriers and as such gave rise to a loss. One of these was linked solely to the Eurostoxx 50 Index only and the rest were either dual index, share or commodity linked. These, by definition, tend to offer higher potential coupons in compensation of the additional risks.

The correlation between risk and reward is further demonstrated when looking at the FTSE 100 Index only plans in comparison to all other plans.

Capital-at-risk autocall plan maturities

All FTSE 100 Only Non-FTSE 100 Only
Total 1500 900 600
Annualised return 8.52% 8.13% 9.10%
Top 25% 12.21% 10.83% 13.72%
Bottom 25% 5.03% 6.05% 3.79%
Matured with a loss 23 0 23
Returned capital only 28 9 19


This 1500 maturity milestone makes a strong case for structured products and in particular, FTSE 100 Only linked plans, non of which historically have matured with a loss.

The results for capital at risk, autocallable structured products hopefully speak for themselves. Is it any wonder that this sector has gained in popularity amongst advisers?

Whilst the sector has seen a wide range of different shapes over the 15 years capital at risk autocalls have been a feature of the UK investment landscape, the likes of the share-linked plans that are the only cloud over these results are now very rare. The sector now offers a regular supply of sensibly constructed products with easy to understand outcomes that represent compelling investment opportunities.

We feel that one of the best examples of what the sector has to offer is of course one that we here at Lowes helped develop: The Mariana Capital 10:10 Plan which is now in its 33rd issue having been first launched in 2015.

The current issue of the Mariana Capital 10:10 Plan December 2019, which is open for subscription until 17th December 2019 offers the following:

Option 1 Has the potential to generate a gain of 7.75% for each year it is in force, with a maximum term of ten years. The plan can mature from its second anniversary onwards and has an annually reducing FTSE 100 Index reference level starting at 102.5% in year two and reducing by 2.5% each year to 82.5% in year ten.

Option 2 Has the potential to generate a gain of 10.45% for each year it is in force, with a maximum term of ten years. The plan can mature from its second anniversary onwards, providing the FTSE 100 Index is at least equal to the Initial Index Level.

Option 3 Has the potential to generate a gain of 12.75% for each year it is in force, with a maximum term of ten years. The plan can mature from its second anniversary onwards, providing the FTSE 100 Index is at least 5% above the Initial Index Level.

All options have an end of year 70% capital protection barrier.

*All data sourced from (April 2009 – September 2019 maturities)

Structured investments put capital at risk.

Past performance is not a guide to the future.

Disclosure of Lowes interests: Lowes has provided input into the concept, development, promotion and distribution of this Plan. The provider's charges/fees are built into the terms of the investment - Lowes has a commercial interest in the Plan as a result of its involvement in its development and promotion. All Plan returns are stated after allowing for these charges/fees. Where Lowes is involved in advice on or the intermediation of this investment to retail clients, it will not receive any payment from Mariana for its input. The aim of developing plans in co-operation with providers, with Lowes input, is that they should be amongst the best available in the market - and, as such, be granted 'Preferred' status, on their merits. Lowes has robust systems and controls in place to ensure that it manages any actual or potential conflicts of interests in its activities.
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