Vest has launched a strategic partnership with DIF Broker in a move to integrate its protective structured investment options strategies into international broker-dealer's offerings for European and South American clients. "The partnership made sense for both parties because DIF Broker is a brokerage house that could benefit from Vest digital solutions' setup while Vest in turn would be able to grow its business and introduce a new set of option-based products to European investors," said Alex Zhigarev (pictured), chief operating officer at Vest's technology subsidiary.
"Vest has been working to expand its US cloud-based platform offering for brokerages and financial advisors to Europe customers," said Zhigarev. "Our goal is to provide a full service [click and trade type of] platform offering marketing and sales, as well as the full product management cycle to support advisers and brokerages."
Under the terms of the agreement, DIF's clients can access options-based investment strategies, including those that provide some downside protection. "Advisers can use our platform for price discovery purposes and to visually construct options-based protection, leverage and income strategies on individual securities and complete portfolios," said Zhigarev. Advisers will also be able to connect to a dedicated cloud platform and access model portfolio updates, which provide ideas built around portfolio construction on a weekly basis, according to Zhigarev.
The US company's subsidiary wants to promote its product set not as a competitor to structured notes but as a complement. "The structured notes market is huge in Europe and the liquidity around structured notes is sometimes comparable to that offered by exchange-traded products" said Zhigarev. "We think options-based investments will get traction in Europe... there are key advantages to our offerings, such as no credit-risk exposure."
Vest launched recently its Armor10 portfolio range, which invests in a portfolio of ETF exchange-listed options and cash instruments, and seeks to provide exposure to domestic, developed international, and emerging markets via a basket of indices (SPDR S&P500 ETF Trust, iShares MSCI EAFE ETF, and iShares MSCI Emerging Markets ETF) with approximately 10% downside protection and 23.92% capped upside returns.
The portfolio range includes an alternative option which invests in a portfolio of exchange-listed options and cash instruments comprising gold, oil, and US real estate ETFs; a multi-asset option, which invests in a portfolio of ETFs tracking global equity markets and alternative asset classes; as well as a custom option, in which investors can customise the ETFs and respective weights comprising the portfolio. All of the portfolios feature a cap on the upside and a buffer protection on the downside.
Vest eyes Europe, pitches Armor10 capped call-like range
UIT wrapper can address some of the limitations around structured notes, Vest
Vest dispatches CBOE's new 'Buffer Protect' Indexes to complement structured note offering
CBOE adds downside protection via Vest