2017 was an intense year for the equity derivatives business at Natixis, against a backdrop of rising markets and very low volatility. This was particularly the case in France, where Natixis performed to strengthen clients' loyalty and increased its market share by adding new partners, according to Aurelien Rabaey (pictured), equity derivatives head of Europe, Middle East & Africa (Emea) sales and global head of financial engineering at Natixis.

"In France, rising markets resulted in a steady roll-over of autocallable products," said Rabaey. "That is certainly good news for investors and it shows that this type of structure is to remain the bestseller in 2018 on the French market. The trend is there."

Rabaey highlights the performance of the bank's 'Autocall R' range, which, for the past three years, has been systematically redeemed early at the end of the first year, paying out an annual coupon of 10% brut to investors. "For us this is one of the most successful products on the market today," said Rabaey, adding that Natixis has been very active in the creation and distribution of autocallable structures, paired with capital guarantee or not.

However, the main differentiating factor for the bank is "price competitiveness, and relevance of the advice of our sales and financial engineering teams", according to Rabaey.

The French bank's approach to innovation goes hand in hand with a range of market access indices developed in partnership with index providers. The indices have a broader [equally-weighted] universe of stocks and subtract a daily basis amount equivalent to a fixed annual dividend to mitigate the uncertainty on future dividends.

The CAC Large 60 Ewer index, one of Natixis' market access indices, accounted for 15% of the total sales volume in the French market in 2017 and collected €2.62bn, second only to the Eurostoxx 50, according to SRP data.

In a low interest rate environment, market access indices enable issuers to offer five to 10-year investment solutions with attractive yield between 5% p.a. and 10% p.a. and a partial capital protection up to a 40% to 50% fall, according to Rabaey.

"Three years since their inception, the Cac Large 60 Ewer Index and Euro iStoxx 70 Equal Weight Decrement 5% have proven their worth performing close to their respective benchmarks [Cac 40 Index and Eurostoxx 50]," said Rabaey. "2017 only confirmed the robustness of market access indices' model. "Cac Large 60 Ewer recorded + 9,61% (vs .9,26% for the CAC40) while Euro iStoxx70 EWD 5% was up 7.78% (vs 6.49% for the Eurostoxx 50) for the whole year."

The Euro iStoxx70 EWD 5% has also been selected recently to underlie Helios Avril 2028, a Euronext-listed EMTN currently distributed via BPCE retail networks. The one-off autocall trigger is set at +15% at the end of the fifth year, without which the note offers participation in the final performance of the index, floored at 90%.

In the absence of major changes in interest rates, financial offers in 2018 should be close to those distributed in 2017, according to Rabaey. "Novelties this year could be expected in the proposed [underlying] themes with, for instance, SRI/climate-based structured products making a comeback on the scene," said Rabaey. "We have a great deal to offer in this area, thanks in particular to the expertise of our index engineering team and our 'Green & Sustainable Hub' launched last year."

According to Rabaey, online platforms are becoming a must in the structured products space and will drive significant activity in the months ahead. On the French market, Natixis is also a pioneer in this field, with the creation in 2015 of a bespoke massive online open courses (Moocs) and video tutorials to train and support the sales teams of major partner networks, according to Rabaey. "Our marketing teams are constantly looking for ideas to improve the quality of service provided to our partners. That is also what Natixis signature is about," he said.

For this year's European awards, for which Natixis won the 'Best Distributor' category in France, SRP has considered 173 tranche (subscription-based) products distributed by the BPCE group, consisting of 129 products with strike dates between October 1, 2016, and September 30, 2017, and 44 products that matured during the same period. The striking products were notes with a term between five months to 10 years, with predominant autocallable feauture paired with soft protection, and mainly linked to single indices, notably Cac Large 60 Ewer, Eurostoxx 50, Euronext Climate Orientation Priority 50 Ewer and Eurostoxx Banks. The matured products were autocallables on Eurostoxx 50, Cac Large 60 Ewer, Eurostoxx Banks, Eurostoxx Select Dividend 30 and Cac 40.

SRP's 15th European Structured Products & Derivatives Conference 2018 will take place on 7-9 February at the etc.venues, County Hall, London.

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