Colin Mclachlan: The impact of volatility on structured product returns

Why ‘kick-out’ products now dominate

clock • 6 min read

Since the collapse in interest rate levels following the financial crisis, the major driver in the pricing of structured products has been around changes in volatility. Colin Mclachlan takes a closer look

Those of you who advise on using UK structured products in your portfolio construction will know providers launch new investment offerings on a regular but discrete basis, mostly for a limited period only. More often than not, each launch remains the same in all facets but one - the headline rate. The change in headline rate is best summarised as being the effect of net changes in the pricing environment from one issue to the next. So what drives the difference in returns offered from one launch to the next? Why would a product launched in June have better or worse terms than a similar p...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes

Join

 

Already a Professional Adviser member?

Login

More on Investment

Muted response as Labour names Grimsby Town FC co-owner next investment minister

Muted response as Labour names Grimsby Town FC co-owner next investment minister

After the sudden exit of Poppy Gustafsson last week

Eve Maddock-Jones
clock 08 September 2025 • 2 min read
Hargreaves Lansdown and Schroders to launch double LTAF offering

Hargreaves Lansdown and Schroders to launch double LTAF offering

From next week

Eve Maddock-Jones
clock 08 September 2025 • 2 min read
Darius McDermott: Complacency at the peak

Darius McDermott: Complacency at the peak

'Markets to hit new highs, while credit spreads are at multi-decade lows'

Darius McDermott
clock 08 September 2025 • 5 min read