Structured Notes Continue to Pay Dividends

11 Mar

Structured notes continue to pay dividends for deVere Group clients. Today the 7th and 8th note of year are about to cash. The 7th note from RBS is returning clients 17.5% in dollar terms, 15% in sterling terms after only 12 months. The 8th note from Morgan Stanley is returning clients 16.75% in dollars, 

Auto callable notes such as RBS 25 (above) are 5 year notes that call after 1 year, 2 year, 3 year, 4 years and finally 5 years if the markets invested in are level or above their starting point. As an example the indexes RBS 25 invested in are listed below.

Underlying Ticker Initial Strike Initial Strike Level Current Level
Hang Seng HSI 09 Mar 12 21086 22771
S&P 500 SPX 1370.87 1543
DJ Eurostoxx 50 SX5E 2515.95 2689

As  you can see all three indexes are above there starting point so this note will cash in after only one year year giving clients a return of 17.5%. Structured notes offer in my opinion excellent value in the current markets.

As a company deVere constantly seek out the best structured notes for our clients.

Nigel Green deVere Group

 

2 Comments

  1. It is refreshing to hear that you like structured notes – so much of the wealth management industry complain that SP are opaque risky derivative instruments and are wedded to shares and bonds. As we know shares and bonds are great at certain times, go sideways for long periods of time and sometimes fall precipitously as in 2008 – March 2009.
    With share markets having risen sharply so far this year, I particularly like an SP based on an index of choice and that has a “look back” option which strikes the product on the lowest index level over the first 6 month of the product.
    Shares and bonds are great, but if serious wealth managers want to improve their risk adjusted returns and be correlated when markets rise and not when the don’t SP provide the perfect compliment to traditional portfolio management.
    Chris Woods

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