Deutsche Bank's fund-linked products remain the bank's best-selling structures, even though, proportionally, it has launched more equity- and interest rate-linked products this year.
Deutsche's latest offering, Private Invest Best Managers Note 2026, which was introduced in Belgium on July 19 and remains open for subscription until September 14, is linked to Private Invest Best Managers, a fund of funds. It is the first time the fund, which aims to invest at least 70% of its net assets in other mixed funds, has been used as an underlying for a structured product. The 10-year, capital protected note offers a coupon equal to the annual performance of the fund, subject to a maximum of 4.50% per annum.
Private Invest Best Managers is on the advisory list of approximately 20 funds Deutsche is recommending to its clients and invests in eight flexible funds, including Flossbach von Storch Multiple Opportunities and Nordea Stable Return, which have performed well, according to Christophe Blontia (pictured), senior product manager at Deutsche in Brussels.
"It is one of our bestselling funds; it's very popular and our clients think it is an interesting fund," said Blontia. Investing in the fund via a structured note is different from a direct investment in the fund because the note offers capital protection, according to Blontia. "It's meant for customers who want exposure to the fund, but without the downside risk. For them, it is an ideal solution and also for those investors who want annual coupons linked to the performance of the fund," he said.
The note does not get a listing, but, in practice, the liquidity for all Deutsche products is guaranteed daily by the bank itself, according to Blontia.
Deutsche is the market leader for fund-linked structured products in Belgium, with 28 of the 47 products linked to a managed fund in 2015, while 18 of the 23 fund-linked products distributed to Belgian retail investor this year have come from the German bank.
Deutsche has also increased the issuance of its equity and interest linked structures this year, distributing 11 equity-linked products in Belgium (2015: four), including offerings linked to the Eurostoxx 50, Stoxx Global Select Dividend 100, Stoxx Europe Select 50 and Solactive Equity Quality Investment Strategy indices, and launched 10 products linked to interest rates (2015: four). "Structured products linked to funds are still the most popular, but there are simply more products this year and, therefore, more equity-linked products," said Blontia. Equity products, with their shorter duration and upside potential, appeal to a different audience, but still an audience that wants capital protection, according to Blontia. "[Equity-linked products] often have a one-off coupon at maturity, and there is no annual income," he said.
Compared to last year, Deutsche has also issued more products denominated in US dollars, although also introducing a number of successful interest rate-linked products in euros, "for clients who want to be a little bit more defensive with a minimum yield", said Blontia. "That's something we didn't do last year."
While fund-linked products remain the bestsellers, there are more products in general, according to Blontia. "There are different maturities, different underlyings, so we can offer a solution for all clients according to their objectives, whether that be growth or protection," he said.
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