Improved investor sentiment fuelled by strong equity markets are resulting in growing demand for bespoke structured products, says George Lucas, managing director of the boutique funds manager Instreet Investment.
“In the current market environment, bespoke products appeal to advisors and their clients who have specific views on the market and are looking to implement these in their client portfolios while managing the risk with known downside outcomes.
“These products offer a tailored solution where either the advisor or client chooses the underlying asset classes and designs the payout profile to meet their specific views and financial needs.
“It also highlights where the financial planning industry may be heading as advisors are looking to offer individual solutions that engage their clients with a tailored solution,” he says.
Instreet recently won a mandate from a boutique adviser practice to construct a bespoke product based on a basket of eight US stocks covering five industry sectors.
Lucas says: “This reflects the need of advisors looking for products that are relevant to their clients’ portfolios.
“This is why advisers have shown a keen interest in our bespoke product structuring capability because it allows them to be able to offer tailored investment solutions.”
Instreet recently closed off another bespoke product based on the ASX200 that gave the investors an exposure to the ASX200 for an upfront cost which was a faction of the notional exposure to the ASX 200.
“After five years and more than $500 million in assets under management, we are now viewed as a product structure and issuer that’s backed by a professional and skilled team. It’s leveraging our capabilities for the benefit of advisers and their groups that excites us the most,” Mr Lucas says.
Instreet is a boutique investment house that works closely with the financial adviser community to conceive and distribute retail investment products. After identifying adviser needs and market trends, Instreet builds customised investments sourcing quality wholesale providers. By doing so, Instreet makes institutional assets available to individual investors. The end result is a range of investment solutions designed to better achieve the goals of clients and advisers.