Deutsche Boerse Group's index business Stoxx has licensed the iStoxx Global Diversity Impact Select 30 Index and the iStoxx Europe Diversity Impact Select 30 Index to Goldman Sachs to be used as an underlying for the issuance of structured products.
The iStoxx Diversity Impact Select 30 index series focus on a pool of leading companies in terms of workforce diversity and discrimination policies and select 30 stocks with low volatility, high dividend yield and high liquidity from among these. The components are weighted according to the inverse of their volatility with a cap at 10 per cent. Both the iStoxx Global Diversity Impact Select 30 Index and the iStoxx Europe Diversity Impact Select 30 Index are reviewed quarterly.
'Investing with social impact is high on the agenda with many of our clients, not only because they believe it is the right thing to do, but also based on extensive research confirming the correlation between the level of diversity within a company and its financial performance,' said Pooja Mishra Prahlad, managing director, head of Europe, Middle East & Africa (Emea) equity and fund derivatives structuring at Goldman Sachs, adding that the iStoxx Diversity Impact Select index family, will enable Goldman's clients 'to gain exposure to diverse companies in a systematic way'.
The iStoxx Diversity Impact Select indices for a global and a European universe address attractive themes including diversity in the workplace and discrimination policies, according to Matteo Andreetto (pictured), chief executive officer, Stoxx Limited. 'The indices combine these themes with a balanced approach between volatility and dividend screenings,' said Andreetto.
Despite being a marginal payer in the European structured products market, Goldman Sachs has marketed over 950,000 products in the region including leverage and flow products. In 2017, the US investment bank marketed 36 tranche-based products in Europe worth an estimated €329m including 16 structured certificates cross-listed in Germany, Austria and Switzerland, 16 certificates in Italy, and two 10-year structured notes in France, according to SRP data.
Most products sold by Goldman Sachs in Europe combine reverse convertible (32 products) and knock-out (29 products) payoff profiles. The most utilised single index underlying by Goldman Sachs is the Eurostoxx 50 index with seven products
Stoxx is the leading provider of indices in the global structured products market with its Eurostoxx 50 flagship the most featured single index across markets appearing in over 2,100 products worth an estimated US$20.5bn in assets. Stoxx is also one of the main provider of smart beta strategies for the structured products market globally and has over US$1bn in assets linked to its iStoxx range.
There are 175 structured products benchmarked to iStoxx indices listed on SRP's database. The iStoxx Europe Next Dividend Low Risk 50 index remains the most popular Stoxx smart beta indexs among structured products providers with over 85 products marketed across jurisdictions followed by the iStoxx Europe Select High Beta 50 index (25 products), and the iStoxx Europe Demography 50 (22 products). Other p[opular indices from the iStoxx family include the iStoxx Europe Centenary Select 30 with 13 products and the iStoxx Global ESG Select 100 index (11 products).
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