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Structured products ‘prove worth’ in 2017 with 7.03% average annualised return

20 February 2018

The average annual return for a structured product maturing in 2017 exceeded 7%, according to product data compiled by Lowes Financial Management.

Lowes publishes regularly analyses of all structured products distributed by UK financial advisers, including in the firm’s yearly produced Structured Products Annual Performance Review. The latest Review shows that of the 658 products maturing in 2017, the average annualised return was 7.03% over an average term of 3.65 years. 94% of maturing products produced positive results for investors.

The upper quartile delivered an annualised average of 10.88% and the lower quartile 2.67%. This was across all product types, deposit based, capital ‘protected’ and capital-at-risk plans.

In comparison, the average return for products maturing in 2016 was 5.48%.

Ian Lowes, managing director of Lowes Financial Management, said: “2017 was another year in which structured products proved their worth for investors. While the positive investment market conditions have played a part in the strong sector performance, few investors would be unhappy with a return of 7.03% a year, not least because typically they will also include a degree of contingent capital protection, making them particularly attractive when, like now, markets are reaching all-time high levels.

“Structured products have been quietly delivering great results year in, year out for advisers and their clients – and doing so whilst protecting original investment capital from all but the most extreme events.”

Lowes own selection of ‘preferred’ plans (193 of the 658 that matured) outperformed the sector average, delivering an average annualised return of 8.75%.

Lowes added: “As the performance of the ‘preferred’ plans shows, careful selection can help deliver above average results. I am delighted our plans have been able to produce this level of performance for our clients.

“The evidence proving the success of these investments, as documented by the Structured Product Annual Performance Review, is now overwhelming. The FCA has made it clear that it expects all advisers who purport to be Independent to consider structured products in their advice process. It is time these versatile products are recognised for the value they can deliver in any properly diversified investment portfolio.”

* A full copy of the Review can be downloaded from https://www.Lowes.co.uk/spreview

Summary of Structured products Maturing in 2017 (click table to enlarge)