Value Creation Report of the SSPA: Q4 2016 turnover slightly below the figure for the previous year – consistently high demand for yield-optimisation products
In the fourth quarter of 2016, turnover of Swiss structured products reached CHF 51.9 billion. This means the value creation of the largest SSPA issuers fell by 5.9% relative to the previous year. Demand for yield optimisation products remained strong, accounting for about 61% of the total. 45% of all products are based on equity products, followed by currencies at 43%. Fixed income increased by more than 109% relative to Q4 2015, boosting its relative share of the total to 10%. Unlisted products accounted for around 71% of output.
2016 performance versus 2015:
- At around CHF 226 billion, in year-on-year terms total quarterly sales were 2% below the figure for the previous year of CHF 231 billion.
- In respect of the product groups, Capital Protection (+3%), Yield Enhancement (+3%) and Leverage (+2%) recorded year-on-year gains. This came above all at the expense of Participation (-7%).
- Amongst asset classes, there was a shift from equities (-6%) to currencies (+3%), while fixed income also doubled from 4% in 2015 to 8% in 2016.
Important insights (Q4 2016):
- At around CHF 53.7 billion, in year-on-year terms total quarterly sales were 5.9% below the figure for Q4 2015.
- There were shifts compared to the previous year in product groups as a percentage of the total: Once again, yield-optimisation products accounted for the lion’s share at 61%, followed by leverage products (16%). Despite a relative year-on-year decline of 31%, participation products formed the third largest category with a share of 13%.
- Compared to the previous year, capital protection products recorded relative growth of 89%, corresponding to a rise of 86% relative to Q3 2016.
- Equities and foreign currencies remain the most frequently used underlying assets. Equities now account for the largest share of asset classes at 45%, whereby the respective figure for the previous year was 47%. Relative to the previous year, the ratio of currency products fell from 43% to 40%. Fixed income increased by more than 109% relative to Q4 2015, boosting its relative share of the total to 10%.
- Unlisted products accounted for 71%, representing a large majority of Swiss structured products. This corresponds to a 1% decline relative to Q4 2015.
- Around two-thirds of sales (65%) are generated on the primary market, while transactions are once again almost exclusively executed on the secondary market (nearly 96%).
- CHF, EUR and USD serve as the main currencies for Swiss structured products, comprising 85% of sales: Following a modest rise relative to the previous year (34%), the USD is now the principal currency, accounting for 36%. In year-on-year terms, EUR and CHF declined to 33% and 16% respectively.