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10-year Review of structured products reveals changed market

16 August 2020

Structured products specialist, Lowes Financial Management, has published a 10-year Review of the structured products market which demonstrates the significant positive steps the UK structured products industry has made over the past decade.

The publication, Retail Structured Product Review of the Decade 2010-2019, based on extensive research, demonstrates why structured products deserve consideration and shines a light on an investment style that has “a demonstrable and enviable track record”, says managing director, Ian Lowes (pictured). “Many financial advisers already know this but there remains a large cohort of advisers that are blinkered to the success of the sector.  Hopefully as the body of work continues to evidence success, attitudes may change.”

The Review digs deep into the sector, exposing the development of the sector over the 10 years, the changes instigated by the regulator, and how the sector has evolved since to offer a much-improved proposition that has and continues to serve investors well.

In the 10-year period 4,444 structured products were issued of which 3,895 products have matured to date. The most popular and consistently offered types of products, capital-at-risk and deposit-based products delivered an annualised return of respectively of 7.84% and 3.64%. Just 60 of all maturities returned a loss.

Ian Lowes, says: “The results lay bare the extent to which those who dismissed the sector where wrong.

“Like any evolving sector, structured products have encountered some challenges and a number of isolated but high-profile incidents understandably impacted adviser confidence. However, this report will show that those who utilised structured products over the last decade have, with very few exceptions, achieved favourable outcomes, very well aligned with investor expectations. It is fair to say that the sector has performed consistently well and rarely disappointed.

“Over the decade, thanks to a couple of regulatory nudges, the sector is very respectable, having evolved to offer a much-improved proposition that served investors well.  We are optimistic that this will continue for the next decade.”

The full Review can be downloaded at: lowes.co.uk/spdecade

Macro analysis for the 2010-19 decade:

• 4,444 – structured products issued.

• 3,895 products matured.

• 2,467 maturities were capital at risk plans

• 60 (1.54%) of all maturities returned a loss

• 3 years, 9 months average investment duration

• 7.84% – average annualised return from capital at risk products

• 3.64% – average annualised return from deposit-based products

• 5.56% – average annualised return from

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