Retail clients are queuing up for products that bet on a recovery in U.K. equities, according to Mario Pytka, head of equity derivatives at Abbey National Financial Products in London. The structured notes give investors more exposure to a fall in equities in return for more participation in any growth.
For example, the firm is offering a product which gives investors double the rise in the FTSE 100 index over five years, subject to a maximum of 200% growth. This is subject, however, to the index not falling below 50% of the initial level. If that happens, Pytka explained, the product becomes a tracker fund of the FTSE 100 index. The fact that the guarantee falls away if there is a major drop in the index shows investors are not expecting the index to plummet.
