Low correlation between individual equities is supporting higher indicative coupons on multi-underlying structured products, while increasing investors’ exposure to single-stock risk.
Growth in US structured products linked to multiple underlyings has outpaced the wider market, with low correlations between individual equities supporting higher indicative coupons on worst-of structures, according to a recent SRP webinar with Kai Volatility Advisors. At the 30 September webinar, Amélie Labbé, SRP’s chief product officer, said issuance growth in worst-of and multi-underlying products was nearly 50%, compared with just under 30% for the overall US market. L