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Bespoke suits a bounceback

Providers and advisers have tipped bespoke structured products for growth as investors seek out flexible products to capitalise on a market bounce.

Speaking at the Money Marketing structured products round table, Blue Sky Asset Management product development director Mark Dickson said recovery structures are an increasing trend among IFAs in the current economic climate.

He said: “They want to know what gives good access to a relatively steady to sharp correction in the market and are looking for a better balance between risk and return.”

Barclays Wealth director Colin Dickie said: “Appetite for risk is gone but investors are getting crunched at the deposit end with banks. At some point, they are going to have to take some risk and structured products are there to provide that solution.” Morgan Stanley executive director of UK structured solutions Marc Chamberlain said appetite for income is an overriding trend but recovery structures had become popular in the discretionary sector and fund management within long-only funds. He added: “You have had a reversion back to simplicity, especially in the retail space. People do not want anything non-FTSE and payoff has to be simple.”

Quantum Asset Management chief executive Mark Mathias said investors’ time horizons have changed and products which offer the possibility of early release of capital or income have become popular.

He also noted an increasing appetite for structures among discretionary managers in portfolio construction and said: “If the professionals are increasing their use of these things, logically it is telling you it is going to be sensible for investors.”

Helm Godfrey managing director Bruce Wilson said: “I am sure that bespoke products which design something very particular to what clients want are a good way to go, I see more of that happening.”

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