South African investment innovation rewarded in Europe

Investec Bank’s Structured Products division has scooped the coveted Best Distributor in Africa award at the 2016 Europe Structured Products & Derivatives conference held in London on Thursday. The accolade marks the rise of alternative investments as South African investors seek innovative means of gaining offshore exposure, while maintaining a healthy risk-reward ratio.

Speaking on the panel discussion that explored South Africa as a new frontier market for alternative investment products, Brian McMillan, Investec Structured Products’ head of retail sales said, “While the South African market is still well behind Europe and the UK in terms of acceptance and understanding of structured products, the market in South Africa lends itself very well to the delivery of structured products. Particularly to the provision of offshore exposure to international markets in foreign currency.”

The Best Distributor in Africa category is judged on annual sales and performance figures over the past year. With South Africans, in particular, hard hit by currency instability and constrained growth prospects, the multi faceted benefits of structured products have drawn attention from investors.

“Given Investec Bank’s international footprint, we are able to deliver attractive payoffs with high levels of protection; and enhanced upside referencing local and offshore markets, in both ZAR and hard currencies. The average return on our structured products maturing in the last five years outperformed their benchmark by 14.3% over a five year investment term, clear testament to the experienced Investec team which created these distinctive products” McMillan said.

The conference and awards ceremony, now in its 13th year, is the biggest and longest running event of the industry worldwide. The best buyside and sellside firms from across Europe and Africa are honoured, as well as the best index providers, law firms, tech companies and ETF providers.

Pending regulatory changes including Twin Peaks and the Retail Distribution Review in South Africa will require independent financial advisers (IFA) to further enhance their knowledge and understanding of structured products. A move that McMillan believes will increase awareness and ultimately, strengthen the advancement of the industry.

“Investec Bank has acknowledged this fact and in response has rolled out nationwide training to over 400 IFA’s in the last 12 months. The challenge and opportunity remains one of improving product awareness amongst the investment community; in a country dominated by the unit trust industry.”

For Investors who would like to access the potential of this Investec Bank investment product set, their latest offering, the China Seas Basket Limited, is available until 3 March 2016. This product offers full capital protection at maturity and the potential to earn double the market return over a term of 4.3 years up to a maximum of 40%, in GBP.