In the third quarter of 2019, 98 reports were published on individual UK structured products, which almost unchanged on the previous three months. There were ten providers whose products were featured this time round and there was a new entrant into the market - Causeway Securities, an experienced product provider in the offshore market. This is encouraging as it shows that the market remains diverse and competitive.
The largest providers are Investec (29%) and Meteor (27%) who between them account for 56% of the market by number of products issued. Meteor’s rate of distributing products has grown steadily in the last couple of years to reach this spot.
The market has continued with the most popular product payoffs dominated by the various flavour of auto-call and they currently represent over 80% of the market. Defensive auto-calls are the most popular with 45% of the overall market share. Classifying auto-calls as growth products (which is a slightly debatable point) then we note that they 86% of the market is growth seeking and the remainder income producing. Auto-calls continue to remain popular as they offer investors a potential attractive early defined return.
The top two Issuers this quarter are again Investec and HSBC Bank plc. Societe Generale has moved up to third place in recent quarters overtaking some of the other issuing banks.
The average duration (expected time to maturity) is similar to last quarter at almost exactly 4 years. This reflects the fact that while most products are 6 years long or more, auto-call dates mean that many of them expect to mature early, leading to this average figure.
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