Société Générale has issued a new 'synthetic zero' play linked to the FTSE100 and the S&P500 indices as part of its listed structured products range, which is traded on the London Stock Exchange.
"Products like SZ51 provide investors with a great way to lock in a fixed return whilst protecting themselves from a partial fall in the markets," Société Générale's director of marketing and partnerships, listed products and exchange-traded funds in the UK, Ben Thompson (pictured) told SRP.
"With the opportunity to earn 58% over six years, even if the FTSE100 or S&P500 fall by 40%, SZ51 offers quite an attractive risk/return profile for the more cautious investor who expects markets to remain volatile over the medium to long term. Plus, as it is listed on the London Stock Exchange, investors have the flexibility to trade in or out at any time during market hours."
The new retail basket index cash settled European-style call warrants series is a seven-year capital-at-risk structure for sophisticated investors seeking yields above cash returns. There are two possible redemption scenarios, which are calculated on the final exercise date of the product.
If the underlying equity closes at or above its strike level on the final exercise date, investors will receive a predefined amount of £158 per product, called the synthetic level. If, however, the product reaches maturity and the underlying level is below its initial value, investors will receive an amount equal to the initial investment reduced by the worst performing index in the underlying basket.
The product struck on 5 December and the minimum investment required is £100.