At mid-year 2011, US structured products sales have already surpassed the $30bn mark, meaning that, barring any unforeseen severe market dislocations or major regulatory speed bumps, this year could set a record for US sales, according to data from SRP.For the full year 2010, the US structured products market sold more than $53bn of products across just over 8,000 structured notes and market-linked certificates of deposit. If this current pace continues until the end of the year, sales could top $60bn in 2011, although issuance itself may be comparable. Year-to-date, just over 4,000 structured products have been sold as volumes have increased per individual issue.
By contrast, just shy of $33bn in structured products was sold during all of 2007, considered to be a good year for the then-burgeoning US structured products marketplace. From the last quarter of 2008 and throughout 2009, the structured products marketplace felt the hefty repercussions of the Lehman collapse and withdrew into its shell, issuing fewer products as US sales slumped.
In the five years since the promising year of 2007, market trends have changed little. In terms of issuance in 2007, 63% of issued products were income products, with 35% of issued products categorised as growth products. At mid-year 2011, a somewhat smaller 58% of issuance was income-generating, with 40% of issuance tagged as growth products. Two percent of the products issued in both 2007 and thus far in 2011 are growth and income products.
Sales, however, have shifted more towards favouring income products in the current economic environment. Year-to-date, 50% of all US structured products sales have been growth products (versus 64% in 2007) and a considerably greater 44% of sales has been income products (versus only 25% in 2007).
Source: StructuredRetailProducts.com
