A structured product provider has called the Investment Management Association’s (IMA) warning on the use of such products “thinly veiled provocation”.
This follows suggestions the IMA’s warning ignores the fact almost 10% of funds in its sectors use structured products in their portfolios.
Last week the IMA sent out a press release entitled “Structured Products – Not To Be Taken At Face Value” which states that disclosure practices for the performance of structured products make them risky investments.
The release compared the performance of National Savings & Investment guaranteed equity bond (GEB) issues with the performance of the FTSE 100 index, finding that on average GEBs underperformed the index by 4.5% annually.
Chris Taylor, the chief executive of Blue Sky Asset Management, a boutique investment firm that specialises in structured investments, says to extrapolate an analysis of GEBs to the whole structured investment universe is unhelpful.
“We view it as both simplistic but also as thinly veiled provocation and we can’t see the value of the information provided,” he says. “If the IMA only analyses savings and investment products they are not qualified to comment on other products.”