Glossary - R
This section provides an explanation for some of the jargon used to describe structured retail products. If you would like us to add additional words then please let us know by clicking here.
A return based on the performance of a basket whose best performing assets are weighted more heavily than those which perform less well. The underlying is typically a basket of sector or regional indices.
A range accrual product is a type of structured product in which the return is based on the number of days that the underlying price or index is within pre-set levels. The longer that the underlying stays in the range then the higher the return produced.
Typically the underlying used in an exchange rate or interest rate.
This is another name for a cliquet product.
Underlying is composed of either commercial or residential real estate (property) values/indices
Reduced capital return
Registered Note (Unlisted)
Retail Bank or Savings Institution
A financial institution that focuses on retail clients, and is either as a bank or as a mutual organisation (savings institution, building society…)
A reverse convertible is a type of high-income structured product. The typical structure offers a high fixed level of income and a full return of capital unless a reference underlying asset or index falls over the term of the investment. If the underlying does fall then the investor has their capital return reduced by the percentage fall in the underlying.
An example of a typical reverse convertible would be a five-year product offering 8%pa fixed income but with the capital return linked to the FTSE100 index. If the index rises, by any amount, over the term then the original sum invested is returned in full. If the index falls then the amount of capital returned is reduced by this fall i.e. a 20% fall in the index over the term would result in a 20% reduction in the capital return.
See also Geared Reverse Convertible.
An income product offering a coupon that rises when the underlying reference rate falls. The coupon is calculated as a fixed rate minus the floating reference rate. Often a non-negative clause is added which prevents the coupon being negative.
This type of open-ended fund is composed of short term cash and derivative products rolling one after another, allowing for protection levels to be guaranteed at specific dates (e.g. once every quarter). Most of the investment is placed in deposits, the rest in buying options.
A rolling fund is the name given to a form of open-ended structured product offered in the form of a fund. The key feature of the product is that the fund price is guaranteed not to fall between set dates, usually every three months or sometimes six or twelve months apart.
A rolling fund is essentially a series of short-term growth products that reinvest any return on an ongoing basis. The main investments of the fund are cash deposits that secure the minimum return, with the balance typically being used to buy call options on one or more equity indices.
Sometimes the unit price has a floor of less than 100% (usually 90% or 95%) of the price on the previous reset date.