The Belgian Structured Investment Products Association (Belsipa) has reported primary market sales of structured products reached €1.4bn in the fourth quarter of 2017, an increase of 33% compared to Q3 2017 while being largely stable compared to the same period in 2016 (-1%). The turnover on the secondary market accounted for €1bn, up 16% from the previous quarter and up 8% compared with year end quarter 2016. The total amount invested in structured products at the end of 2017 stood at €32.3bn, a 1% decrease quarter-on-quarter and a 4% decrease year-on-year, according to the trade body.

Over the last year, primary market turnover in structured notes grew by 34% (54% compared to Q3 2017) while structured funds on the other hand marked a decrease on an annual basis of 54% (and 40% compared with Q3). Products linked to an equity underlying still dominate the Belgian market both in terms of trades on primary and secondary markets (69%) and invested assets (65%), according to Belsipa.

'Throughout 2017 Belgian investors kept structured products as an integral part of their portfolios,' said Florence Devleeschauwer (pictured), chairwoman, Belsipa. 'The high level of secondary market activity indicates in this context that customers follow trends and proactively respond to changes.'

According to Devleeschauwer, the figures also confirm that investors were strongly aiming at a certain exposure to the strong equity markets that were seen globally in the last year. 'While using structured products enable investors to optimize the risk-return profile of their holdings on a broader basis, the increased interest in capital protected products in the last quarter delivers an example for how this can be done concretely. Many customers were expecting probably some market corrections.'

There were 556 new structured products issued in the fourth quarter, an increase of 55% compared to the 359 new products in the previous quarter, with 82% of all new products issued in the leveraged products segment.

At the end of December 2017, a total of 3,410 products were open/non-matured on the Belgian market. Of these, 1,395 were structured notes, which remained the dominating wrapper in the Belgian market.

According to SRP's own data, there were 79 structured products worth an estimated €770m with strike dates in Q4 2017. Belfius, with 16 products, was the most active distributor, followed by BNP Paribas Fortis (14), KBC (12) and BPost Bank (11). The vast majority of products were linked to equities, including 51 products linked to a single index and 12 products to a basket of shares. Fifteen products were linked to interest rates and one product, BNP Paribas Fortis' USD Capped Note Gold 2023, was linked to commodities.

For the whole of 2017, both issuance and sales were down compared to previous years. Three hundred and three structured products with combined sales of €4bn and from 12 different providers struck between January 1 and December 31, 2017, a decrease from the 326 products worth €5.5bn with strike dates in 2016.

The Belgian market was led by KBC, with a 35% share of the market, followed by Belfius (21%) and BNPP Fortis (20%) with Deutsche Bank and BPost Bank (9% and 6%, respectively), completing the top five. Almost 40% of the total sales was invested in products linked to a single equity index, with proprietary, or house indices, such as the Dynamic Deep Value Equity Europe, Sustainable Goals Europe and Global Women Leadership Select 30, popular among Belgian investors.

Maturities focused on the long term with 70% of all products having a term of more than six-years. Of these, 130 products (60%) had a duration of 10-years or more.

The best-selling product on the Belgian database in 2017 came in the shape of the three-year KBC Life MI+ European Selection, a three-year unit linked life insurance (Class 23) which was issued via the Arcade Finance vehicle. The 90% capital protected product which participates 100% in the performance of a basket of 30 stocks sold €75m at inception.

Belsipa was founded in 2013 and has Belfius, BNP Paribas Fortis, ING Belgium, KBC, Societe Generale (France), Commerzbank and Natixis as full members. Next to them, also Axa Group, Crelan, Bank Nagelmackers, AG Insurance and Deutsche Bank provided data to the report which covers approximately 95% of the Belgian market.

Click the link to view the full Belsipa report.

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