Spotlight on… industry sector indices

An estimated US$8.5 billion was collected from 3,110 structured products linked to a single industry sector index in 2022, down 20% by sales volume year-on-year, but an increase of 70% and 123%, respectively, compared to 2020 and 2019.

SRP’s industry sector group covers strategies that offer exposure to equity sectors defined by economic activity –from agriculture to industrial, healthcare and financial services.

In 2022, 54 different industry sector indices were used as underlying for structured products. Of these, the Solactive Canada Bank 40 AR Index (SOLCAB40 Index), seen in 1,162 products worth an estimated US$2.2 billion, accumulated the highest sales volume.

The index, which tracks the performance of the Solactive Canada Bank TR Index adjusted for a synthetic dividend of 40 index points per annum, made its debut on the SRP database in 2022 and was exclusively used in the Canadian market.

The Eurostoxx Bank index (SX7E Index) on the other hand was available across 17 different jurisdictions. It was the underlying for 550 products that sold a combined US$2.1 billion (2021: US$2.3 billion), with the highest sales achieved in France (US$800m from 200 products) and Italy (US$630m from 53 products).

Four more Solactive indices featured in the top 10, including the Equal Weight Canada Banks 5% AR Index (SOLCBEW5 Index), United States Big Banks AR Index

(SOUSBBAR Index), Canada Insurance AR Index (SOLCINAR Index), and the Canada Bank 30 AR Index (SOLCABAR Index). All four were only seen in the Canadian market, where their combined sales totalled US$1.4 billion from 662 products (2021: US$5.4 billion from 1,982 products).

The Energy Select Sector Index (IXE Index) was only used as a single index in the US (US$450m) while the Stoxx Europe 600 Basic Resources

(SXPP Index), which achieved sales of US$260m from 40 products was seen only in continental Europe, mostly in France, Germany and Italy.

The top 10 was completed by S&P/TSX Composite Index Banks (TXBA Index), which like Solactive’s indices was only utilized in Canada (US$240m) and Euro iStoxx Banks GR Decrement 50 Series 2 Index (IX7S2D50). The latter was seen in 69 products sold to retail investors in France (US$230m).