Retail investors in Belgium and the Netherlands have been buying up a stock basket product launched last month by Fortis Investments. The firm has raised around EUR110 million in Belgium and EUR80 million in the Netherlands for the 18-month deal, which was only marketed through Fortis branches.
The basket deal is capital-protected using options and a zero-coupon bond. Fortis wrote short-dated knockout call options on 20 single stocks, including names such as Deutsche Bank, Sony and American International Group. Investors start with a maximum coupon of 20% over the 18 months they are invested, but each time a stock drops or rises by 20% of its starting price, the call option knocks out and the coupon decreases by 2%, explained Frederik Stoop, deputy head of structured products origination in Belgium.
Stoop said the success of the product was surprising considering it was launched in the summer, but he attributed this to the novelty of the deal. The firm is looking to launch a repeat of the deal in September and hopes to raise another EUR100 million, he added.
