Hedge fund-lite absolute return – not least multi-strategy beasts such as Standard Life GARS or current favourite H20 MultiReturns – smart beta and multi-factor funds are often discussed in glowing terms by fund pickers and the media alike.
Still others, such as structured products, have had a tougher time winning investors’ affection in recent years, particularly post the 2008 crisis. Why is this the case?
It is true that some investors were left out of pocket after the Lehman Brothers collapse, however rare this cataclysmic event may have been.
Of more recent interest was last year’s thematic review from the FCA which found some structured products routinely over-estimate potential returns by as much as 10%. It singled out failings around suitability, over-concentration of client assets into products, and failures around tax considerations.
Whether or not these criticisms may also apply to other asset classes is a topic of discussion for another time. However, it is worth mentioning recently published research from StructuredProductReview.com which found that 416 of the 424 products that matured in 2015 generated a positive return for investors.
With volatility in both equity and commodity markets dominating the investment landscape, there are wealth managers who see today as an ideal time to use structured products.
