Lowes Magazine Issue 127

INVESTMENT

Structured product maturities The second quarter of 2023 saw a raft of structured product maturities with those most commonly held by our clients shown in the table below. Most of these were designed in cooperation with Lowes utilising the FTSE 100 or its close cousin, the FTSE CSDI, as the underlying and all of these out-performed their respective underlying index over their holding periods. Unfortunately, this quarter witnessed the maturity of the first loss-making structured product in a long time. However, this product was linked to the performance of three individual shares, rather than an index and as such was a high-risk, speculative investment only used for a small element of larger portfolios. The decline in the Vodafone plc share price meant the acceptance of the high risk did not pay off on this occasion.

We have just marked the 20th anniversary since the first structured product autocall was issued. We recommended the first one back in 2003 and since then, they have evolved to become the mainstay of the UK sector. Lowes’ influence, such as the introduction of the 10:10 and 8:8 Plans, has helped to shape

the sector for better investor outcomes. Lowes evaluates each new autocall when issued and monitors all through to eventual maturity, giving us a comprehensive view of the market. Lowes has marked the 20th Anniversary by publishing an extensive Consumer’s Guide to Autocalls, providing an independent review of the sector and its performance. The report can be accessed at: Lowes.co.uk/autocall-guide

Counterparty

Maturity date

Term (years)

Gain (%)

Société Générale Morgan Stanley

03/04/23 11/04/23 12/04/23 28/04/23 09/05/23 22/05/23 22/05/23 16/06/23 26/06/23 28/06/23 28/06/23 28/06/23 28/06/23

2 2 2 2 2 2 2 6 2 4 5 4 2

14 18

BNP Paribas

14.9

Morgan Stanley Société Générale

13 15

Citigroup Citigroup

22.4 18.3

Natixis

-66.88*

Goldman Sachs

13.4 31.6 35.7 41.2

Citigroup

Natixis

Citigroup

Credit Agricole

14

* High risk, speculative, share linked plan. All others linked to FTSE 100 or FTSE CSDI.

Lowes.co.uk

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