Skandia Investment Management has started marketing a structured retail product that gives exposure to a basket of five funds through a call option. The product is unique in linking to a basket of funds, said Jasper Thomas, investment marketer at Skandia in Southampton.
Thomas said the exotic nature of the instrument meant it was difficult to find a derivatives house to price the structure. "There were only three banks which offered us indicative pricing on the option," said Thomas. Skandia chose Morgan Stanley, but declined to name other banks it spoke to about the trade.
The five funds the structured product references includes Norwich Property Trust and New Star's Mid-Cap 250, noted Thomas. He said it is popular with U.K. ex-patriots and is attracting a growing amount of business from pension funds. The next tranche of the product will be issued in two months.
