Decrement or synthetic dividend indices have become a popular underlying for structured products in some jurisdictions and more recently have piggybacked on ESG underlyings to gain visibility. It remains to be seen how these indices play out for the investor in the next few years in terms of performance and transparency.
Most retail structured products link to equity underlyings: in most cases, the natural vehicle is an index. A flagship index covering one or more regions can be the obvious choice, particularly for first time investors in structured products. These include the S&P 500 in the USA, Eurostoxx 50 in Europe, Nikkei 225 in Japan and the MSCI World Index for more global coverage. The overwhelming majority of structured products are issued using price return indices as the underlying Such indice