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Our experts frequently write blog posts about the findings of the research we are conducting.

Displaying 10 out of 32 results for "Principal Protected Notes".

SEC Scrutinizing Exchange Traded Notes

(Dec 2013)

Risk.net is reporting that the Office of Capital Markets Trends of the Securities and Exchange Commission (SEC) is looking into the details of exchange traded notes (ETNs). The office, headed by Amy Starr, is looking into the fees and the disclosure of risks and formulas used to determine ETN indicative values according to statements made by Starr at the Structured Products conference in Washington, DC on December 10.

ETNs have been a frequent subject on the blog and regulators have issued...

BDCs as the New REITs

(Nov 2013)

Brendan Conway at Barrons had an interesting piece back in September about business development companies (BDCs) and their similarities to real estate investment trusts (REITs). His story highlighted that BDCs in some sense resemble REITs in the 1990s, in that they are considered "previously exotic areas that went mainstream." Indeed, we are seeing more and more coverage of BDCs in the mainstream media, along with the troubling development of non-traded BDCs, just as we have seen non-traded...

Study Finds that the Average PE Investor Just Breaks Even

(Nov 2013)

Brendan Conway over at Barron's pointed out an interesting new study from the National Bureau of Economic Research entitled: Valuing Private Equity. Private Equity (PE) investments -- typically called limited partnerships (LPs) -- are long-term, illiquid securities representing (perhaps not surprisingly) an equity interest in a private company. Investors are typically referred to as limited partners. The study notes that while private equity returns tend to be high, "it remains controversial...

Fidelity to Launch Mutual Fund Based on Hedge Fund Strategy

(Oct 2013)

We see it again and again: complex investment strategies packaged into traditionally conservative investments. We have seen corporate debt linked to exotic derivatives positions (structured products), exchange-traded products linked tocomplex futures positions (commodities and volatility ETPs), variable annuities linked to options strategies (structured product based variable annuities), and even certificates of deposit with complex payoff structures (structured CDs). Now, we are seeing more...

IRS Could Put a Halt to REIT Conversions

(Jun 2013)

We've talked a lot about real estate investment trusts (REITs) before. In the US, REITs are companies that invest at least 75% of their assets in real estate, pay out almost all of their annual income in dividends, but also pay little or no corporate income tax. As we've discussed before, many companies have tried to qualify for the REIT designation to reduce their tax liabilities, even if their business is only peripherally related to real estate.¹ This 'REIT conversion boom' has been...

Investors Returning to Capital-at-Risk Products

(May 2013)

Yakob Peterseil of Risk.net recently noted that "[b]anks are boosting issuance of leveraged notes linked to US equity indexes and notes that pay out when yield curves steepen." According to the article, reverse convertibles and buffered notes are seeing a resurgence as investors begin to be more optimistic about stock market growth. In addition, principal-protected structures like structured certificates of deposit and principal-protected notesare falling out of favor as attractive terms are...

Resurgence of Commercial Mortgage Backed Securities and Decreased Underwriting Standards

(Apr 2013)

Late last week, Reuters reported that the issuance of so-called 'large-loan' Commercial Mortgage Backed Securities (CMBS) has recently spiked and that the increase in volume may be due in part to more lenient underwriting standards. Large-loan CMBS issuance in the first few months of 2013 has already surpassed that of 2012.

CMBSs are created by securitizing a pool of commercial mortgage loans such that an investment in a CMBS is a claim on the future cashflows from the pool of commercial...

529 College Savings Plans Underperform Similar Mutual Funds -- Morningstar

(Apr 2013)

On Monday, Morningstar Fund Research issued their 2013 529 College-Savings Plans Industry Survey, which reviews the performance of the 529 industry in 2012. Their study finds that "college savers are continuing to invest in 529 college-saving plans at an impressive clip, even though their performance has lagged that of similar funds in recent years."

529 Plans are typically run by states and are used by investors to save for future education expenses such as college tuition on a...

CFTC Investigating Potential Manipulation in Interest Rate Swap Market

(Apr 2013)

Bloomberg's Matthew Leising is reporting that the Commodity Futures Trading Commission has issued subpoenas to current and former employees at swap brokerage firm ICAP (IAP) "and as many as 15 Wall Street banks" for alleged manipulation of a key benchmark price in the interest rate swap market.

The benchmark, known as ISDAfix, "provides average mid-market swap rates for six major currencies at selected maturities on a daily basis." Similar to LIBOR, the rates are set based on end-of-day...

Goldman Sachs Uses JOBS Act to Sidestep Volcker Rule

(Apr 2013)

Evan Weinberger at Law360 is reporting that Goldman Sachs may have found a way around the Volcker Rule--the ban on proprietary trading by banks, which also prohibits sponsoring hedge funds and private equity funds--by using another controversial regulatory measure, the 2012 JOBS Act (of which we have spoken before):

By setting up an independent business development company in which it will hold a minority stake and limited leverage exposures, Goldman will be able to engage in at least limited...

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