In the wake of aggressive interest rate hikes and bearish stock markets, investors now tend to put their money in principal-protected products across asset classes that offer fixed or floating rate coupons.
In terms of flows, credit and rates have been the biggest contributors to the structured products business in second half of 2022 and the first half of 2023, replacing equities which dominated in previous years. This largely reflects the flight to safety for investors.
Bankers involved in structured products manufacturing described a significant increase in the contribution of credit and rates products to their business, as compared to equities, during this period.
Diversification also played a key role as structured product investors focused intensely on diversifying their portfolios across all asset classes, including equity, rates, and credit, to maximize the risk-adjusted return of their portfolios.
In addition to cross-asset diversification, investors also focused on intra-asset diversification or diversification within each asset class. For example, there are different credit profiles within a fixed-income portfolio. This can allow the investor to spread the credit risk within the asset class and reduce the overall volatility of the portfolio. The key to potentially improve the risk-adjusted return of a portfolio is to avoid overexposure to any specific asset class.
Although the trend for investors to become more risk-averse began about two years ago, the interest rate hikes strongly pushed them towards principal-protected structured products. This trend is likely to continue as the possibility of more rate hikes – and market volatility – looms.
It is in this context that we are announcing the winners of the Best Bank for Investment Solutions Awards as part of The Asset Triple A Private Capital Awards for Private Banks, Wealth & Investment Bank Advisers, Solutions and Index Providers 2023.
BNP Paribas Wealth Management
In equities, BNP Paribas Wealth Management (BNPP WM) provided principal-protected products in dynamic ways in terms of pay-off structure.
In credit, BNPP WM provided products that catered to the market demand for floater exposure, short duration, and high credit spreads to accommodate the flight to quality.
In FX and commodities, BNPP WM provided timely solutions to ride the high market volatility and generate outsized gains.
BNP Paribas Wealth Management is recognized as:
# Best Bank for Investment Solutions, Asia
# Best Bank for Investment Solutions, Equity, Asia
# Best Bank for Investment Solutions, Credit, Asia
# Best Bank for Investment Solutions, FX, Asia
# Best Bank for Investment Solutions, Commodities, Asia
Société Générale
In rates, Société Générale (Socgen) provided yield enhancement and diversification products to investors. They also provided positive impact finance and sustainability solutions in the Formosa market.
In equities, Socgen continued to be the leading issuer of callable bull and bear contracts (CBBCs).
Société Générale is recognized as:
# Best Bank for Investment Solutions, Rates, Asia
# Best Bank for Investment Solutions, Equity, Hong Kong
CIMB Group
CIMB Group focused on driving sales and after-sales support to clients, providing regular updates on their investments, especially during heightened volatile market conditions. This highlights their commitment to the business, structuring capabilities, and emphasis on client servicing.
In rates, CIMB provided Callable Islamic Range Accrual (CIRA) negotiable instruments.
In credit, the bank provided Credit Linked Structured Products (CLSP) during periods where the products benefited from higher interest rate levels.
CIMB Group is recognized as:
# Best Bank for Investment Solutions, Malaysia
# Best Bank for Investment Solutions, Rates, Malaysia
# Best Bank for Investment Solutions, Credit, Malaysia
# Best Bank for Investment Solutions, FX, Malaysia
# Best Bank for Investment Solutions, Commodities, Malaysia
CTBC Bank
CTBC maintained its leading position in terms of market share, something it has kept for over 15 consecutive years. It also leads the developments in the local derivatives market through the Bankers Association, and is the only bank to develop an in-house Treasury System.
CTBC Bank is recognized as:
# Best Bank for Investment Solutions, Taiwan
# Best Bank for Investment Solutions, Rates, Taiwan
# Best Bank for Investment Solutions, FX, Taiwan
# Best Bank for Investment Solutions, Commodities, Taiwan
CIMB Thai
CIMB Thai maintained its leading position in structured investment offerings. A key focus for the banks was providing unfunded derivatives structured solutions. The bank also helped its clients in terms of best practices, commitment to product innovation, process automation, and enhanced customer experience.
CIMB Thai is recognized as:
# Best Bank for Investment Solutions, Thailand
# Best Bank for Investment Solutions, Multi-asset, Thailand
# Best Bank for Investment Solutions, Equity, Thailand
# Best Bank for Investment Solutions, Rates, Thailand
# Best Bank for Investment Solutions, FX, Thailand
Maybank Investment Bank
Maybank provided market-driven solutions such as principal-protected products with upside recovery participation.
Maybank Investment Bank is recognized as:
# Best Bank for Investment Solutions, Equity, Malaysia
Yuanta Futures
Yuanta Futures maintained its leading position in TAIFEX Futures and Options and Foreign Futures.
Yuanta Futures is recognized as:
# Best Brokerage for Investment Solutions, Listed Derivatives, Taiwan
Please click here for the full list of winners.
