Twenty-eight structured products with estimated sales of €365m were launched in Belgium in September. The new products, from nine different providers including Axa Belgium, Belfius, Crelan, KBC and ING, were linked to equities, funds, currencies and the interest rate.

Both issuance and sales are down from last year: 218 structured products with a combined sales volume of €4.1bn had strike dates between January and September 2015, compared with 280 structured products worth €6.9bn which struck during the same period in 2014.

Equity-linked structures remain dominant, although this year’s sales of €3.4bn are down from the €5.3bn sold over the same period last year. Sales of fund-linked products are on a par with last year (€498m: 2015 v €473m: 2014), while products linked to the interest rate saw a sharp decrease in volumes sold: 33 structured products worth just €273m struck during the first nine months of 2015, down from 40 structured products with sales of €1bn during the same period last year.

The Belgian market is one of the front runners in Europe when it comes to the use of sustainable indices. Since May 2013, 72 structured products have been linked to ‘green’ indices with investors able to choose from the Ethical Europe Equity, Finvex Sustainable & Efficient Europe 30 and, since last month, ING’s Sustainable Europe Low Risk Equity index.

The iStoxx Europe ESG Select 30 is the latest green index available to Belgian retail investors. The index was used for the first time in September as underlying for Crelan’s Credit Agricole CIB (FR) Green Europe ESG Select 90. Crelan was keen to use a sustainable index as underlying for this product because the issuing programme of Credit Agricole is also green, said Filip Gabriels, head of product management (off-balance sheet) at Crelan. “This product, because it concerns a green portfolio, affects sustainability in two ways,” he said. “Firstly, as the underlying index and, secondly, because the monies which are collected are intended to support Credit Agricole’s green portfolio.”

The Belgian Asset Managers Association (Beama), reported that assets under management (AUM) for capital-protected funds decreased by 10.2% to €1.22bn during the second quarter of 2015. Structured funds represented a capital of €10.65bn mid-2015, with €8.62bn of outstanding assets linked to equities and €2.03bn to interest rates, loans and currencies, according to the association. “The decrease [of €1.22bn] can be attributed to net repayments of €610m and a negative market performance of €600m,” said Hugo Lasat, chairman of Beama.

The Belgian Structured Investment Products Association (Belsipa) announced, during the release of its 2015 half-year report, that primary market turnover of structured products sold in Belgium amounted to €3.75bn, a decrease of 23% compared with the last six months of 2014 (€4.89bn). Equity-linked products accounted for €3bn, which equals a decrease of 5%. Products with a fixed-income underlying accounted for €260m, which is a decrease of 82% compared with the second half of 2014.

The numbers show that Belgian investors continue to see structured products overall as a welcome part of their portfolio, said Alain Flas (pictured), president of Belsipa. “They evidently are self-confident decision-makers who have their own market view and occasionally also switch between different sorts of products and asset classes,” said Flas. For leverage products the number of new products increased by 85% on a term-to-term basis, according to Belsipa.

Meanwhile, in the Netherlands, Citi became the latest provider to change the name of its leverage products to turbos. Until recently, the US bank used the name speeder for its leverage range, which comprises Best (barrier equals strike), limited and open-ended certificates. Out of the six providers serving the Dutch market, only ING is still holding on to the name sprinter for its range of leverage products.

“The reason why we changed the name is twofold,” said Robin Said, head of turbos in the Netherlands at Citi. “The first reason is the same as the one quoted by some of our competitors, and that is that it increases transparency in the market. It allows investors to more easily compare and understand the products. The second reason is that we believe – as a smaller issuer in the Dutch market – that it improves Citi’s positioning towards Dutch investors.”

In the past, Citi had to spend a lot of time on education to let the Dutch investor know that a speeder is exactly the same product as a turbo, just a different name, according to Said.

The full market reviews for Belgium and the Netherlands will appear shortly.

Related stories:
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Credit Agricole green note sustainable in more ways than one, says Crelan
Low interest and strict regulation behind decrease capital-protected funds, Beama
Belsipa: Leverage products drive Belgian issuance, turnover falls 23%
Turbo tag change will help increase our market share, Citi