Structured Products for Retail Investors: Lessons from Germany
Abstract
German retail investors have a breathtaking array of almost 250,000 structured products or warrants to choose from. This report examines this market and assesses the potential in other regions.
Structured products, sometimes referred to as warrants or certificates, have become popular in a number of European countries, particularly in Norway, Germany, and Switzerland. However, the German market stands out in terms of the size and depth of its market. With almost 250,000 instruments traded, retail investors can select from a bewildering array of derivative structured products from mundane call or put options in indices to highly complex derivatives based on baskets of equities, commodities, interest rates, or currencies. As extraordinary as the current number of structured products is, German banks are pumping new products into the market at a staggering rate of about 1,500 new instruments per day.
A new Celent report, , examines the German market, including a review of product types, trading volumes, and distribution channels, and draws conclusions regarding the applicability of such instruments to other markets.
"The German experience with structured products suggests that there are large, untapped pools of potential products for retail customers in other countries, particularly the simpler structured products. However, regulatory hurdles in a number of countries pose a formidable hurdle to their introduction," says Octavio Marenzi, author of the report.
The 19-page report contains nine figures and two tables. A table of contents is available online.
Members of Celent's Retail Securities & Investments research service can download the report electronically by clicking on the icon to the left. Non-members should contact info@celent.com for more information.