Deutsche Bank has launched the Global Transitions Autocallable 2026 in Belgium. The nine-year structured note is linked to the iStoxx Global Transitions Select 30 Index and is issued in collaboration with Goldman Sachs.
The iStoxx Global Transitions Select 30 Index - which is licensed exclusively to Goldman Sachs - makes its debut on the SRP database and consists of shares of 30 global companies from different sectors which are exposed to major future evolutions (such as social development, demography, energy, infrastructure and technology). The stocks are selected based on their dividend yield and volatility in the past.
"The three 'global transitions' themes that belong to the index are social evolutions, scarcity of natural resources and infrastructure," said Christophe Blontia (pictured), senior product manager at Deutsche Bank in Brussels. "Although the index has not been developed by us we decided to use it as the underlying for our product because we also believe in the theme and the long-term vision of the index," said Blontia. "Commercially it works too, the story to the customers, about the trends everyone can see."
Deutsche Bank Belgium first used Goldman Sachs as issuing company for its Safe Click Notes VI back in 2008, according to SRP data. After a barren spell, with no new issues, the partnership was rekindled by the end of 2016. "Goldman Sachs is a historical partner that we started to re-use as issuer last year," said Blontia. "We have since issued a number of products with Goldman Sachs, but in absolute terms exposure is still limited." There is definitely still room for Goldman Sachs paper in the portfolio of Deutsches clients, according to Blontia. "Goldman has a good name. It's one of the best performing banks in the world, so in terms of creditworthiness it is certainly attractive to our clients.
"The advantage of our open architecture is that we can choose the issuer that offers the best conditions for a particular product," said Blontia. "Hence that at the moment, since the end of last year, we have launched almost every month a product with Goldman Sachs. Goldman's autocallables are good, they are very competitive, their pricing is much better than the pricing of other banks, and that of course is beneficial to our customers, which is crucial for us."
Up until last year, the majority of structured products distributed in Belgium by Deutsche Bank were linked to funds, followed, at some distance, by fixed income and equities. This year, however, we have seen a shift with equity-linked products becoming the dominant force, both in terms of issuance and sales volumes.
"If you look at the underlyings, equity-linked products have sold the most this year, more than fund-linked and fixed income," said Blontia. "These are mainly capital protected products. The demand for capital protection remains strong, certainly after the increase in the stock markets in the last five to seven years. People want to have exposure to equities but on the other hand they are also wary of a correction.
"That's why it's ideal for them to get exposure to the equity markets with a product which offers full capital protection," said Blontia. "It is certainly not a conscious decision that we issue less fund-linked products, but at the moment there is indeed more demand for equities. The biggest demand is for products with 100% capital protection, especially because these products differ from direct investments in equities or funds."
Deutsche Bank has distributed 28 structured products in Belgium this year to date. Of these, 14 products are linked to equities, 10 are linked to funds, and four products are linked to interest rates. This year's products, Deutsche Bank AG asides, are issued via BNP Paribas, Citigroup, Credit Suisse, Goldman Sachs, Natixis and Societe Generale, respectively.
Click the link to view the iStoxx Global Transitions Select 30 guideline and factsheet.
Related stories:
Deutsche Bank pitches foreign currencies to Belgian investors to salvage upcoming fixed-income maturities
Deutsche Bank gets timing right with help from Goldman Sachs
Deutsche Bank debuts Swedish krona-denominated note in Belgium