JPMorgan has recently seen an uptick in demand for principal protected commodity-based derivatives products for institutional investors, according to David Kitson, head of currency and commodity structuring in London. The firm is marketing these products because investors are seeking alternatives to the equity and credit markets to increase investment returns. JPMorgan began showing these products to investors three months ago, he noted, declining to specify how many deals it has completed.
The firm has seen strongest demand for deals referenced to the price of oil and gold, but has also structured transactions referenced to base metals and commodity indices, including energy, and plans to eventually sell them to retail investors.
