The telecom giant’s recent 56% dividend cut calls into question the wide use of decrement indices in Canada and France, particularly those on single stocks.
The dividend cut at an unprecedented scale during the Covid-19 pandemic remains a cautionary tale for structured products issuers. Since then, decrement overlays have gained ground in markets like France, Canada and more recently the US , offering a way to manage dividend risk. As the global economy continues to recover from the last crisis, a severe dividend cut in the underlying stock can leave investors exposed as the deduction amount from total return becomes ma