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No structured products distributed by UK intermediaries matured with a loss last year, according to the 2018 Structured Product Performance Review produced by structured product experts Lowes Financial Management.

The review, released yesterday, analysed the 381 structured products that matured in 2018. It found that not a single capital at risk product that matured in 2018 produced a loss, despite the wild swings seen across financial markets.

In total, just 23 products (6.04%) returned capital alone, while the remaining 358 (93.96%) generated positive returns, with an average 6.33% gain across the products.

Lowes’ own list of ‘Preferred’ plans matured with more gains, with its 107 products delivering an average annualised return of 7.88%.

For the majority of structured products, the FTSE 100 was the underlying measurement and accounted for 68% of maturities, with the EURO STOXX 50 and EVEN 30 among other linked indices.

Of the 23 products that did not return a gain, all but two were deposit based or capital protected contracts and they were, with one exception, linked to measures other than mainstream indices.

Ian Lowes, Managing Director of Lowes Financial Management, said:

“Despite significant volatility in markets in 2018, the last 12 months have been fantastic for structured products. Our own list of ‘Preferred’ plans delivered exemplary gains, with an average of 7.88% per annum over an average term of 3.4 years.”

Among the best performing structured products last year – known as Lowes’ Star performers – was Investec’s Dual Index Step Down Kick-Out Plan 9 (Investec Option), which gained 24.5% after 2 Years. Linked to the FTSE 100 and the EURO STOXX 50, it delivered an annualised return of 11.58%.

The Mariana 10:10 Twin Option FTSE Kick Out Plan, created in cooperation with Lowes and launched in October 2015, was also among the top performers, with a gain of 37.5% after 3 Years, equating to an annualised return of 11.19%.

Lowes added:

“Once again we have seen some standout performers in 2018, but without a doubt the biggest achievement for the sector is that our ‘Black Hole’ award given to the worst structured product to fail investors was empty this year as no products produced a loss. This is the first time this has happened.”

The fund is now available on many major investment platforms and provides an easy way to invest across multiple structured investment strategies, linked predominantly to the FTSE 100 Index, with no more than 10% credit exposure to any one bank.

Lowes Financial Management manages almost £1bn of assets and has invested over £380m into structured investments on behalf of clients.

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Stuart Fieldhouse

Stuart Fieldhouse has spent over 20 years in journalism and financial communications, including six years as a wealth management correspondent for the Financial Times group, covering capital markets and international private banking, and as an investment banking correspondent for Euromoney in Hong Kong.

Stuart has worked as head of content at CMC Markets, supporting the re-launch of its global financial spread betting and CFD trading platforms. He is also the author of two books on trading, published by Financial Times Pearson. Stuart continues to work with hedge funds, private banks, stock exchanges and other financial institutions on their communications, data and marketing requirements.

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