Investec Wealth & Investment has launched a structured product service with two portfolio mandates.
The service allows clients to choose between the two portfolios based on their personal circumstances, risk appetite and investment objectives.
Both options give retail clients access to institutional product markets, which Mark Stevens, head of intermediary services at Investec Wealth & Investment, said means they can benefit from large cost savings because fees charged in the retail market would be much more.
The mandates also give investors access to liquid secondary markets, unlike structured products traded in the retail market, where investor’s money is often locked-in for a multi-year period.
Contrary to popular perception, structured products are not simply ‘buy and hold’ investments.Peter TasouMr Stevens said structured products can provide the outperformance and portfolio protection that many advisers and their clients are looking for when they are managed correctly.
The Defined Returns Structured Product Portfolio, which is medium to high risk, invests in equity markets.
The Diversified Growth Structured Product Portfolio, which is high risk, aims to provide capital growth with an even greater exposure to equities.
Both portfolios are managed by Investec’s specialist structured products team, and have a minimum investment requirement of £250,000.
Each will only be made available to clients following the completion of a rigorous due diligence process.
Peter Tasou, associate portfolio manager and head of structured products at Investec, said: “We adopt an active rather than passive approach to structured product portfolio management as, contrary to popular perception, they are not simply ‘buy and hold’ investments.
“Portfolios will be managed by a team with a high level of experience of derivatives and bank credit, the two key components of any structured product.”
The portfolios will also factor-in the changing risk parameters of each product over its life cycle.
However Marvin Evans, principal of Old Bank Wealth Management, said: "I’m afraid I’m not a great fan of structure products.
"Invariably the costs of the downside protection limit the upside and more often than not, the clients would have been better off staying in cash and waiting for a fall back in markets, or investing gradually over a period of time."
katherine.denham@ft.com
