Stropro Global Income Fund

bonds and achieve a more risk-adjusted return compared to equities and fixed income benchmarks."

The fund launch coincides with the onboarding of Morgan Stanley as a new issuer on Stropro's multi-issuer platform this week after Goldman Sachs joined in April. The issuer pool also includes Natixis, Marex Solution, Macquarie Bank, BNP Paribas, Citi, Société Générale and boutique house C2 Financial Group.

Since 2020, Stropro has distributed 106 structured products with AU$140m (US$93 million) traded notional, majority of which are fully-funded while seven are leveraged tax-deductible strategies in the form of call option participation notes or limited recourse loans.

A total of 1,315 transactions have been executed, including 200 year-to-date.

The firm posted AU$18m traded notional inflow in May - a record month, according to Streater.

"FCNs have become more popular in Australia given that yields have come up," he said. "For the 41 FCNs we’ve distributed, the longest tenor is eight years with the average being around three years."

Most of the FCNs have autocall mechanism set every six or 12 months, bringing the average life down to 1.5 or 1.8 years.

"Snowball is still quite popular as investors are looking for more liquidity and more clarity of their risk and return," added Streater. "We've done 100% protected participation style notes and 100% protected income notes since 2022."

Beyond equity, Stropro has offered carbon commodity carry trades linked to the ICE EUA Futures Dec22 Contract. The SGI Diversified Multi Asset Enhanced Index has also been traded through 100% protected participation notes and call warrants. "The products cater to investors' demand for uncorrelated returns or returns less correlated with equities," Streater said.

"We have seen some interest in structured notes linked to both local and offshore fixed income funds."

In April, a structured note linked to the Pimco GIS Income Fund was offered with AU$15m notional.

"That's how we have captured appetite on fixed income generally. We've explored a few bond rates, like repo repacks, but it's not there yet as the return is not quite justifying the complexity," said Streater, adding that a term deposit with an Australian bank can easily offer a return of 4.5% pa.

"Rates can be quite complicated. Australian investors tend to shy away from complexity," said Streater. "Their portfolio is still quite concentrated in domestic equities and property, but we think looking for global diversification continues to be a strong thematic."