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Right on time

CompareStructuredProducts.com - 28/08/2024

Reflecting on the thirteen FTSE linked capital at risk autocalls that were faced with their final observation date in 2024 and last chance saloon for maturing with positive returns, Monday saw the last two such plans mature with a full six years of snowballed coupons.

Returns of 43.5% - 61.5% were rewarded to investors at the end of the six-year terms. Whilst it is rare to see FTSE 100 only autocalls run for their entire maximum term, investors in these plans were rewarded with the maximum possible gain as defined by the product terms. Looking at average strike levels for the thirteen plans and the average final index levels, the FTSE rose by approximately 7.7% over the six years. Whilst earlier in the year a positive maturity was by no means certain the final result of 5.5 to 8 times return on the performance of the underlying market investors will no doubt be happy with their investment decision made over half a decade ago. For reference the FTSE 100 total return index which includes dividends paid by the constituent companies returned c. 36% since 2018 – demonstrating again the strength of structured products, especially in range bound markets.

The chart below shows the FTSE 100 over the term of these thirteen plans, that marginally missed out on their penultimate observation but triggered a positive maturity on their final chance thanks to the rise in the FTSE this year. We can also see that the capital protection barriers were far from being touched, even at levels seen in the darkest days of the pandemic.

Almost 2050 capital at risk FTSE* linked autocalls have matured since the first was issued 21 years ago with only 13 failing to produce a gain and simply returning the invested capital. Of these, 8 reached final maturity over ten years ago, all but one of these would have returned positively had they had an extra year on their term. The other 5, we will have to wait to November to see if their fate would have been the same – at current market levels, positivity would have prevailed.

*FTSE incorporates plans linked soley to the FTSE 100 or its very close, 99%+ correlated 'cousin' the FTSE CSDI, which tracks the same 100 stocks with the same weightings but accounts for dividends differently.

Structured investments put capital at risk.

Past performance is not indicative of future results.