The fintech continues to expand its footprint in the structured products market with an increasing presence in Europe. In less than a year MerQube’s indices have more than trebled their AuM in the retail structured products market.
Sales of structured products linked to the MerQube US Tech+ Vol Advantage Index launched with J.P. Morgan in 2021 have reached US$1.85 billion. Since then, the index specialist fintech has deployed 56 other indices used across more than five thousand products worth US$3.8 billion.
Across the board, we’re seeing a more informed and selective investor base - Tianyin Cheng
The top three MerQube indexes by AuM are part of its Vol Advantage range which uses intraday volatility overlays - MerQube US Tech+ Vol Advantage index 50%; MerQube US Large Cap Vol Advantage index 48%; MerQube US small cal Vol Advantage index 2%.
However, in France and Finland all the MerQube indexes offer a synthetic dividend on custom indexes such as the MerQube Europe Large Cap Basic Resources 20-50 Point Decrement as well as on single stocks – MerQube Engie 1 Point Decrement EUR Index; MerQube MGBN 5.0 Index Points Decrement.
SRP spoke to Tianyin Cheng (pictured), head of products at MerQube, to discuss the thematic landscape and why ESG and decrement remain drivers of activity and opportunities in Europe for the fintech going forward.
Demand for ESG products has decreased over the last couple of years, according to SRP data. What do you think is the reason for this decline?
Tianyin Cheng: While political and regulatory uncertainty has contributed to the slowdown in ESG product adoption in certain markets, it’s not the only — or even primary — factor. Across the board, we’re seeing a more informed and selective investor base. For a time, there was a strong appetite for anything with an ESG label. Now, investors are demanding credible, bespoke strategies underpinned by granular, transparent data that align with their specific ESG objectives.
This shift toward higher standards is why we announced our partnership with Impact Cubed in November 2023 — to provide ESG index solutions backed by robust analytics that meet these evolving expectations.
At the same time, demand for structured products hasn’t disappeared — it’s shifted. We’ve seen growing interest in simple decrement strategies across single stock, static basket, core regional and multi-sector designs. In a more volatile and discerning market, the focus has turned toward tactical and customizable exposures.
How is regulatory uncertainty impacting adoption of ESG structured products?
Tianyin Cheng: Regulatory uncertainty does play a role in slowing adoption, but it’s not the sole or even primary driver. What we’re seeing is a more sophisticated and discerning investor base that is increasingly critical of how “ESG” is defined and implemented.
Heightened regulatory scrutiny has amplified this scrutiny, but investor expectations were already evolving — with greater emphasis on measurable impact, credible ESG integration, and long-term performance resilience. This shift toward higher standards and more cautious product selection inherently lengthens the evaluation cycle, which in turn slows overall market adoption.
Is decrement offering value in the current environment?
Tianyin Cheng: Yes, though we’ve definitely seen preferences shift over time. When dividend levels were relatively stable, percentage-rate decrement indices were the go-to — they were simple and intuitive.
But as we head deeper into 2025 and macro uncertainty rises, we’re seeing a renewed interest in point-based decrement structures, which tend to be more robust when dividend yields are volatile or difficult to forecast.
The good news is that our platform supports both approaches, and we make it easy for clients to configure and visualize each structure with full transparency.
What are the main topics at a product development level on MerQube’s agenda?
Tianyin Cheng: Right now, we’re really focused on growing our lineup of single stock, static basket, and core benchmark indices. One of the biggest enablers here is The Garage, our newly launched self-service platform that empowers clients to design, test, and iterate on their own index strategies with speed and flexibility.
Whether it’s building a static basket, layering in a covered call overlay, or applying a decrement, the tool makes it fast and intuitive. On the ESG and thematics front, we’re working closely with data providers who specialize in sustainability and macro trend analysis to make sure our offering stays relevant and high-quality.
Do you think the use of thematics and overlays can add diversification to investors in structured products?
Tianyin Cheng: Absolutely — when thoughtfully constructed, these indices bring real diversification benefits. ESG and thematic strategies allow investors to tap into long-term innovation and sustainability trends, while decrement and overlay strategies, like autocallables and covered calls, can provide income and help buffer downside risk. From a product design perspective, this opens up more flexible and differentiated payoff profiles.
This article was first published in the SRP Index Report 2025: ESG, Thematics & Decrement Indices.
Click in the link to download the first two chapters of the report.
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