Swedish retail products maturing in December delivered healthy returns to investors, providing new rollover opportunities to domestic providers. Of the 75 products maturing last month, 24 had a performance of over 100% when adjusted to the issue price, and nine had a performance of over 120%.
”We generally see a higher rollover rate if investments have delivered a good return,” Benny Johansson, head of retail investment products at Handelsbanken, told SRP. “When we create products at times when we have large volumes maturing ,we tend to do similar structures to the ones maturing.”
However, Johansson said, any rollover products are based on the bank’s current market view and the pricing. “Good performances might also help the investor to invest again in structured products, but it is important for the provider to see the upcoming market trends,” he said. “We have many returning customers buying our structured products and we believe that the main reason for this is our ambition to create efficient products that deliver high returns for our clients over time.”
The best performance was delivered by Garantum’s four-year Autocall Svenska bolag nr 39, which sold SEK50m (€5.65m) in 2009 and paid out 260% of initial capital.
Handelsbanken was behind two of the best performing structures maturing in December, including Aktieindexobligation Världen topp 15 919AX, which paid 153.08% of initial capital and Aktieindexobligation Världen topp 15 919AV, which returned 123.7% of initial capital at maturity. These were both four-year products linked to a basket of shares.
According to Johansson, this kind of performance could help to rebuild the reputation of structured products in Sweden. “Naturally our customers are happier with their products in rising markets when they get a good return, rather than in falling markets when they only get their notional amount back,” he said. “However, at the bank we are very pleased with the performance of our structured products over time. Our equity-linked notes have delivered an average annual return of 6.9% since 1994.”
Aktieindexobligation Världen topp 15 919AX sold SEK95.54m and Aktieindexobligation Världen topp 15 919AV sold SEK81.83m.
Johansson concluded that Handelsbanken strongly believes in long-term customer relationships with the investor in focus rather than individual products. “In Great Britain Handelsbanken has been ranked top for customer satisfaction and loyalty for the last four years,” he said. “In Sweden, Handelsbanken has had the highest level of customer satisfaction since surveys started in 1989.”
Handelsbanken was the leading provider in Sweden in 2013 with a 37% market share.