Denominations in foreign currencies (especially US dollars and Norwegian krone), (partial) capital protection, and products linked to managed funds continue to be important themes in the Belgian structured products market.
Of the 31 products added to the SRP Belgium database in July, six were denominated in US dollars and three in Norwegian krone, while 28 protected at least 90% of the nominal invested, with a further three products using funds as underlyings.
AG Insurance became the first Belgian provider to launch a structured unit-linked life insurance product (Tak 23) in a currency other than the euro. The eight-year AG Protect+ USD Dynamic Deep Value is denominated in US dollars and offers 135% of the rise in the Dynamic Deep Value Equity Europe index. The product is issued via BNP Paribas Fortis Funding, while BNP Paribas Fortis acts as the guarantor.
The decision to offer a Tak 23 insurance in US dollars has two distinct advantages, according to Jan Bronselaer, team manager unit linked, market development savings & invest, AG Insurance. "The interest rates in the US are higher compared to those in the Eurozone, which means we are able to offer a 100% capital protected product," said Bronselaer. "At the same time, the difference in interest rates also increases the potential for the future return."
Crelan launched EconoFuture NOK 2024, its first fund-linked structured product. The eight-year, capital protected note, which was issued in collaboration with Credit Suisse, offers 100% participation in the positive performance of the Crelan Fund EconoFuture, subject to 32 months backend averaging.
Until now, the bank's structured products were exclusively linked to equity indices. "We have never before used a fund as underlying for our structured products," said Filip Gabriels, head of product management (off-balance sheet) at Crelan.
In the Belgian market, there are a number of providers who, next to indices, use managed funds to underlie their products, according to Gabriels. "We thought it would be interesting to use our own fund Crelan Fund EconoFuture for our first fund-linked structured note," said Gabriels. "The fund is managed by Econopolis and exclusively available at Crelan and, therefore, well known by our agents."
The note is denominated in Norwegian krone, making it the bank's fourth structured product in the currency. "Apart from euros, there are two other currencies in which we launch structured products," said Gabriels. "We are positive on both the Norwegian krone and the US dollar. Not only that, but because in the past retail clients often invested in krone and US dollars."
Deutsche Bank'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, which aims to invest at least 70% of its net assets in other mixed funds. 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, 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.
Interpersona, the multi-issuer service platform that specialises in the design and distribution of structured solutions to the investment management industry, recently launched its first undertakings for collective investment in transferable securities (Ucits) fund, Serenity, which has currency options in euros, sterling and US dollars and for which RBC is the custodian. The strategy can invest up to 55% in direct equities or equity funds while the remaining funds are invested in bonds and other Ucits compliant financial products.
"Structured products are still very important, but, just like many others, we think diversification is very important and, therefore, we have set up the Serenity fund, to provide more options within our company for our clients; a one-stop shop idea," said Wim Roosens, managing director at Interpersona.
The Serenity fund was created because interest in structured products is declining, according to Roosens. "The structured products market has always been driven by commissions, which led to a number of inferior products being distributed," he said. "Some of the products issued and sold to clients in the past have been pretty bad and high risk, which has caused reputational damage for the industry."
The launch of Serenity responds to the company's plans to offer alternatives to structured products as well, according to Roosens. The fund is managed by Fiducenter in Luxembourg, while Interpersona looks after the distribution. "Belgium is a very interesting market for funds and we are now busy looking at which other markets we could offer added value with Serenity," said Roosens.
The full Belgian market review for July will appear shortly.
Interpersona: we service clients who are no longer of interest to the major banks
Crelan skips equities with first fund-linked note
Deutsche Bank's fund-linked products remain best-sellers
Belgian insurer launches first ever unit-linked life product denominated in foreign currency