Search for income renews interest in structured investments: Stropro
Structured investment volumes are surging globally as investors combat a low interest rate environment.
The structured investments sector has touched USD $7 trillion and is larger than both the global ETF market ($5.3 trillion) and Hedge Fund market ($2.9 trillion) [1], notes CEO and Co-Founder, Anto Joseph of Stropro, an innovative investment platform specialising in structured and alternative financial products.
Joseph said, “We launched Stropro to assist Australian investors access income strategies through an easy and transparent route. The Stropro platform provides alternative ways to generate income and access global opportunities, which were previously only available to private banking clients of big banks.
“We work with a panel of top tier global investment banks including Societe Generale and Credit Suisse to arrange financial products that deliver reliable income in a low interest rate environment.”
Stropro has recently launched an investment from Societe Generale linked to the ASX 200 index that pays a fixed return of 7% p.a.
“In this current environment, we have observed an increasing number of investors moving up the risk curve in search of yield. For example, investors have been seeking high dividend stocks and listed products to increase income. But they remain exposed to equity market volatility and potential capital losses arising from a market correction.
“The ASX 200 linked investment reduces an investor’s exposure to equity market volatility with a downside buffer. So the capital is at risk if the ASX 200 index falls more than 35%. The downside buffer is designed to preserve capital over the term of the investment.
“Even though we cannot predict future performance of the financial product, after back testing the strategy daily over 20 years it has never resulted in a capital loss.[2]
“The ASX 200 linked investment has already received a tick of approval from many direct investors and family office clients. The feedback has been an appreciation for its ability to generate a return equivalent to high dividend paying stocks but simultaneously defend against a market correction,” says Joseph.
Ben Streater, Chief Product Officer for Stropro added, “We are not surprised that the global structured investments market is surging. Last year a record USD $70 billion flowed into structured investments in the USA [3]. Here in Australia, Stropro has improved access to structured investments by launching 25 strategies in our first 18 months. Our fixed return strategies have generated an average annualised return of 8.26% p.a. with no capital losses.”
A driving force behind Stropro has been a move to improve transparency and investor experience within the industry.
Joseph added, “In 2020, Stropro offered the ability for investment holders to migrate their structured investment holdings to Stropro, free of charge to provide them with enhanced visibility of their holdings. We have been thrilled to see many positions migrate to Stropro with investors ultimately benefiting from improved access and visibility.”
“The Stropro experience is a streamlined digital journey that allows investors to access investments via their mobile or laptop and utilise comprehensive portfolio tools to manage their positions,” he said.
[1] Source Blomberg: https://www.bloomberg.com/professional/blog/sure-time-to-grasp-the-potential-of-structured-products/
[2] Source Bloomberg Terminal: ASX 200 Linked Investment data is based on data from Jan 1st 2000 to 4th May 2021. Extracted 5th May 2021.
[3] Source Bloomberg & Structured Product Intelligence https://www.bloomberg.com/news/articles/2021-02-09/cathie-wood-is-supercharging-wall-street-s-exotic-bond-business
