Redefining Structured Products: ‘SPs: Need, Evidence & USPs’

Portfolio construction considerations for a more challenging investment environment

John Maynard Keynes is attributed with saying, ‘‘When the facts change, I change my views, what do you do?’’ This may be a good question for professional advisers to consider, when thinking about structured products.

This presentation / discussion provides an informative and thought-provoking session for professional advisers, presented by Chris Taylor, global head of Tempo Structured Products.

Synopsis  

Particularly in light of prevailing events (including Covid-19), the presentation will start by thinking about the markets backdrop and outlook (including looking at what the bond market is signalling regarding inflation, interest rates, economic growth and future returns expectations) and portfolio construction considerations for a more challenging (and potentially low) returns environment.

What can professional advisers expect in terms of ‘alpha’ by active fund management or ‘beta’ by passive fund management; and what are the merits and benefits of including ‘alpha by contract’ via structured products, in diversified and balanced portfolios.

Comprehensive and granular data regarding UK retail structured product performance over the last decade is now available – and objective analysis of it evidences the virtues and value of structured products and the efficacy of including them in diversified and balanced portfolios.

Structured products offer significant and important USPs: they can be designed to generate positive returns without requiring markets to rise, with a defined level of protection if they should fall. In addition, structured products equate to ‘investing by contract’, offering ‘alpha by contract’, based on legally binding, contractual obligations (in contrast with other investment options).