Twenty-three structured products, including offerings from Amundi, Banque Privée 1818, Conservateur, Primonial and Swiss Life, were added to the SRP France database in April. Forty-three products with a combined sales volume of €1.8bn struck during the course of the month, up from the 36 products worth €575m seen in March. One year ago, in April 2015, 53 products (€1.4bn) had strike dates in France.
Autocallables and equities continued to dominate the market: 19 products featured the knock-out payoff while 22 out of the 23 new products were linked to either a single index (21) or a basket of indices (Swiss Life Banque Privée Objectif Juillet 2016: Cac 40, Eurostoxx 50 and S&P 500). The sole non-equity structure was Crédit Agricole's CA Oblig Immo (April 2016), a ten-year medium-term note linked to Immanens OPCI (Organisme de placement collectif en immobilier - Collective investment in real estate).
Natixis was involved in three autocallables which were distributed via Banque Privée 1818, Swiss Life Banque Privée and Banque Populaire Gestion Privée, respectively. "The autocallable structures are a great way to invest in equity markets," said Christophe Hilaire, equity solutions sales WM France at Natixis. "With performance targets known in advance and important returns of 6 to 10% per year [autocallables] are perceived as one of the best alternatives to the contracts in euro at the moment."
The Eurostoxx 50 was the most popular index in April (12 products), followed by Cac 40 (three) and the Euro iStoxx Equal Weight Constant 50 (three). The last replicates the returns of the Eurostoxx 50 Equal Weight index while assuming a constant dividend. Over the course of a year 50 index points are subtracted which corresponds to a dividend yield of 5%. Single products were linked to the Ethical Europe Equity, iStoxx Europe Centenary Select 30 and Stoxx Global Select Dividend 100, respectively.
Twenty-nine structured products which sold €1.8bn at inception, matured during April. Caisse D'Epargne's Capital Locker 2, a six-year capital protected fund linked to the Eurostoxx 50 provided a return of 153.9% (7.45% pa). At maturity, the fund still held assets of €88.5m of the €133m invested in the initial subscription period. LCL's Sécurité 106 AV Mars 2010 (initial sales €76m/€39m at maturity), a CPPI product with risky assets linked to shares, bonds and managed funds, returned 115.55% after six-years (2.44% pa) while investors in Barclays The Max saw part of their nominal invested disappear. The 10-year fund returned 75% after the Eurostoxx 50 closed at 2,890.35bp on April 5, 2016, down almost 1,000bp from the 3,863.92bp registered when the product first struck on April 5, 2006.
Societe Generale reported equity activities experienced a decline in performance, both in flow activities and structured products, during the first quarter of 2016. Revenues in equities, at €540m, were down 36.8% compared to 1Q15, in market conditions marked by investors' risk aversion, the French bank said. However, listed products grew substantially on the back of market share gains in Europe while the group maintained a recognised position in securities transactions with a market share of 9.5%, according to the bank. At the same time, BNP Paribas blamed a downturn in 1Q16 revenues of the equity and prime services (E&PS) business unit on a limited demand for structured products in declining markets in Europe. Revenues for the E&PS business, at €428m, were down by 41.2% in the first quarter of 2016 compared to a very high base in 1Q2015, the French bank said.
The outstanding volume for structured funds in France stood at €28bn at year-end 2015, down €8bn from the previous year and far removed from the outstanding of €75bn in 2007, according to the Autorité des marches financiers (AMF). The creation of structured funds continues to be difficult in the current market environment with the very low interest rates, said the French regulator in its recently published annual report for 2015.
The full French market review for April will appear shortly.
Societe Generale reports decline in structured products during first quarter
BNPP reports weak demand for structured products in 1Q2016
Groupama: we sell on average €800m worth of structured products annually
Amundi beefs up ETF, indexing and smart beta business