The structured products sector has delivered a range of positive returns for investors and their advisers over the past year – despite ongoing geo-political tensions and challenging markets – the latest annual Review of the sector from Lowes Financial Management reveals.
The Annual Performance Review 2025 shows that 2024 was a record year for UK retail structured product maturities. Some 669 products matured – including 627 capital-at-risk products and 42 structured deposits. 660 delivered positive returns, 7 deposit-based products returned capital only, and just two made a loss (the latter two were designed to deliver a return in falling markets). The average annualised return for all maturing 627 capital-at-plans was 7.49% over an average term of 2.81 years – see table below.
The FTSE 100/ FTSE CSDI continue to be the most prevalent underlying measures, used in over 77% of all products maturing in the year.
The majority of structured products maturing in 2024 were those termed autocall products. 476 autocall products matured in 2024, with 54% of them linked to the FTSE 100. They delivered average annualised returns of 7.98% with an average term to maturity of 2.32 years.
Digging down into other individual investment types – average annualised returns for Growth products, of which 14 matured in 2024, was 7.93% with an average term of 5.86 years; and for Income delivering products, of which 137 matured in the year, average annualised returns were 5.77% over an average term to maturity of 4.21 years.
Higher performing ‘Preferred’ plans
Lowes ‘Preferred’ plans – the ones Lowes selected for recommending to the firm’s own clients – outperformed all average annualised headline returns from the sector during the year.
There were 111 ‘Preferred’ plans that matured in 2024. All generated positive returns, as well as outperforming the wider market. For capital-at-risk products the average annualised return for Preferred products was 8.38% (against the sector average of 7.49%) over an average term of 3.13 years.
Lowes ‘Preferred’ FTSE 100 or FTSE CSDI linked capital-at-risk autocalls, available to the wider market, achieved an average annualised return of 8.51% over an average term of 2.9 years.
Ian Lowes, Managing Director of Lowes Financial Management, said: “Structured products have once again proven their value to investors, with maturing products delivering some sterling returns in 2024.
“Structured products are unsung heroes of the investment world – quietly delivering for investors year on year.
“As with any investment there are risks involved, but with capital protected against all but a significant fall in the market, they can provide valuable diversification in an investment portfolio. Investors and financial advisers using these products have seen consistent positive returns for over 10 years.
“There have been some noted developments in the market over that time, including the introduction of longer term investments, which can significantly increase the probability of investors achieving positive returns.
“Not least with Consumer Duty in mind, these are definitely investments that should be on all financial advisers’ radars.”
To help create even better access to and returns from structured products, Lowes created the UK Defined Strategy Fund, a fund of structured products, offering daily liquidity. The fund has returned 26.13% over 5 years*. The fund primarily invests in strategies using UK large cap indices, including the FTSE CSDI – a benchmark created by FTSE Russell and linked to the same 100 companies but using a steady 3.5% dividend yield – as a credible alternative to the FTSE 100 and one allowing for higher potential coupons.
A copy of the Annual Performance Review 2025 can be found here on the Lowes website.
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