If the launch goes ahead, Morgan Stanley says it would most likely be delivered through its recently approved Dublin Oeic.
Executive director of structured products Marc Chamberlain says the Oeic would probably be FTSE-linked and include collateral arrangements through government bonds to mitigate any counterparty risk. He says: “We are looking at Oeic structures and I would like to have a fund out there by the end of the year. If the timing and the market environment are right, then it would work very well.”
BNP Paribas launched its Privalto capital-protected Oeic-based stabiliser funds last September and Aviva followed with the capital-protected Oeic defined returns fund 1 in May.
Chamberlain says an Oeic-based structure is eligible for offshore bonds, unlike traditional note-based structures, but he says they would complement rather than replace existing products.
Chelsea Financial Services head of investment products Matthew Woodbridge says: “Advisers looking at a client’s portfolio on an open-ended platform may find themselves not looking at closed-ended products, so if there are long-only structured products it might open up the market to them.”