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

NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

NextWealth MD Hopkins on staying ahead of advice sector changes, data challenges and flattening MPS fees

Making technology work better

Katrina Lloyd
clock 03 July 2025 • 9 min read
IFAs look to boost clients' private markets exposure

IFAs look to boost clients' private markets exposure

Expect increase in stock market volatility

Jen Frost
clock 02 July 2025 • 2 min read
Winds of change: Private markets access for retail investors

Winds of change: Private markets access for retail investors

Investing in LTAFs, accessibility aside, needs careful consideration

Dorian Hughes
clock 02 July 2025 • 5 min read