MARKET UPDATE
US Market: single index structures back on track, worst of baskets lose traction In part one of a two-part article, we look at the size of the market, the latest investment themes, and the most popular underlyings and payoffs over the last five years.
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ssuance and sales of structured products continue to increase in the US market. As of 30 April 2022, a total of US$209 billion from 63,179 live structured products was outstanding in the US market.
Between 2018 and 2021, issuance increased by 60% (the monthly average in 2021 was just over 2,600 products) while sales volumes were up by almost 65% (from an average of US$5 billion per month in 2018 to US$8.4 billion per month in 2021). Some US$33.3 billion was collected from 10,776 products with strike dates between 1 January and 30 April 2022 – down 5.2% in sales volume and up one percent in issuance compared to the same period in 2021 (Jan-Apr 2021: US$35.1 billion from 10,664 products).
US: outstanding volume and issuance
Source: StructuredRetailProducts.com
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www.structuredretailproducts.com
Having first emerged in December 2020, the year 2021 saw the advent of ARK ETFs with US$940m collected from 500 products issued during the year. The ARK Innovation ETF was used as underlying in 489 products – either on its own, or as part of a basket – that sold US$900m. There were also structures tied to ARK Genomic Revolution ETF and ARK Fintech Innovation ETF. Seventy percent of the products featuring ARK ETFs had a knockout feature and more than halve of the volumes came from structures issued on the paper of J.P. Morgan. In 2021, there was a strong trend towards products linked to iron and steel-manufacturers such as Nucor, Cleveland-Cliffs, Steel Dynamics, and US Steel. While only 11 products (US$10.5m) featured these companies in 2020, that number rose to 129
