CompareStructuredProducts.com - 10/07/2024
In the second quarter of 2024 the FTSE rose 2.66%, breaking all time highs for the UK index, with the highest closing level of 8,445.80 achieved midway through May. With over 77% of Q2 maturities being solely linked to the FTSE 100 (or FTSE CSDI) these elevated levels have ensured a high volume of early maturities for autocalls and other plans with early calls. Other commonly used indices that are often used in conjunction with the FTSE are also at or near all-time high levels, again warranting ample positive maturities.
198 UK retail structured plans matured in the quarter, with all but two delivering positive results for investors. The only maturities to return no gain were two that did not expose investors to risk of loss as they were deposit-based contracts linked to the ‘redundant’ Investec EVEN 30 Index. All of the rest returned gains with the 190 capital at risk plans realising average annualised returns of 7.15% over an average term of 3 years.
Q2 2024 Structured product maturites
| Capital at risk | Lowes 'Preferred'- capital at risk | Deposit based | Lowes 'Preferred'- deposit based | |
| Number of maturities | 190 | 34 | 8 | 1 |
| No. returning positively | 190 | 34 | 6 | 1 |
| No. returning capital only | 0 | 0 | 2 | 0 |
| No. realising a loss | 0 | 0 | 0 | 0 |
| Average term (years) | 3.01 | 3.00 | 4.25 | 6.00 |
| Average annualised return | 7.15% | 7.89% | 1.64% | 4.67% |
| Avg. upper quartile | 9.20% | 9.56% | 3.45% | - |
| Avg. lower quartile | 5.19% | 6.70% | 0.00% | - |
Of the 198 maturities, 11 autocalls ran their full term with all benefiting from six years’ worth of snowballing coupons. 13 maturities in Q2 were fixed term contracts that were always destined to mature last quarter.
Q2 2024 best performing structured product maturities by annualised return
| Provider | Plan Name | Counterparty | Index Link | Maturity Date | Investment term (years) | Index Movement % | Final Gain % | Annualised Return |
| Mariana | FTSE 150 Kick Out Plan June 2020 | Natixis | FTSE 150 EWDR | 26/06/2024 | 4 | 13.7 | 60 | 12.5% |
| Walker Crips | UK & US Kick-out Plan (MS128) | Morgan Stanley & Co. International | FTSE 100 & S&P 500 | 13/05/2024 | 1 | 8.5 26.6 |
12.5 | 12.4% |
| Walker Crips | UK & US Kick-out Plan (MS131) | Morgan Stanley & Co. International | FTSE 100 & S&P 500 | 24/06/2024 | 1 | 11.0 25.3 |
12 | 11.9% |
| Mariana | 10:10 Plan June 2022 (Option 3) | Morgan Stanley & Co. International | FTSE CSDI | 17/06/2024 | 2 | 16.5 | 24.5 | 11.6% |
| Mariana | 10:10 Plan April 2022 (Option 3) | Morgan Stanley & Co. International | FTSE CSDI | 22/04/2024 | 2 | 6.7 | 22.8 | 10.8% |
The table above demonstrates that the risker structures (excluding share-linked, which have not been seen for some time) will reward investors with the highest returns – provided the markets are on your side. Dual index and Hurdle contacts can often entice investors with high headline coupons – common sense should prevail when using these, ensuring extended maximum terms and adequate overall portfolio diversification.
Over Q2, there were 35 Lowes ‘preferred’ maturities, 34 of which were capital at risk plans, returning an average annualised return of 7.89% across an average duration of 3 years – outperforming the sector average by 0.74%.
Past performance is not indicitve of fututre results
© CompareStructuredProducts.com is a trading style of Lowes Financial Management, authorised and regulated by the Financial Conduct Authority
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