Long perceived as tactical instruments, structured products are now emerging as a fully-fledged building block in the construction of diversified allocations.
Their flexibility makes it possible to express different risk profiles, integrate protection mechanisms or optimize certain market phases, while providing complementary diversification to funds or ETFs.
For Maxime Gohin, Associate Director at CMF, the challenge is not just to generate returns, but to structure solutions that are consistent with overall portfolio allocation. Selection of underlyings, market conditions, quality of structuring: several parameters determine the long-term relevance of these solutions.
In this interview, he discusses the place of structured products in a modern allocation, the importance of price discipline, and the levers for creating value over a complete investment cycle.
Private asset managers are evolving in a more complex and demanding environment. How do you define your role alongside them?
Today, private equity managers are operating in a particularly demanding environment: geopolitical uncertainties, stressed markets, the return of high interest rates and increased regulation. Against this backdrop, our role is first and foremost to decipher our partners' needs, provide clarity and propose appropriate solutions.
For many years, our company has been supporting asset management professionals as an independent expert in the asset class of structured products. This experience enables us to provide a well-constructed view of the different market phases and how to integrate these solutions into an allocation.
Our approach is also based on complementarity with VIA AM, an asset management company that develops in-depth financial research based in particular on the reprocessing of accounting data. This methodology gives us a more accurate picture of how companies create economic value, and enables us to select the most relevant underlyings.
In addition to investment solutions, we also provide our partners with a monitoring tool to facilitate the management of these products over the long term.
Under what conditions do structured products become a genuine strategic tool in an allocation, rather than just an opportunistic yield driver?
Structured products have their place in an allocation, and can represent a significant weighting in a portfolio.
They offer great flexibility, with a wide range of risk profiles, covering the entire SRI scale from 1 to 7. Some structures can offer total capital protection, while others are designed for more dynamic profiles.
Their appeal also lies in the diversity of the mechanisms they enable. Depending on their construction, they can, for example, generate a regular return, offer partial protection against equity market downturns, or even benefit from bear market scenarios . They also provide access to certain underlyings, such as commodities, which are sometimes more difficult to exploit directly.
This flexibility means that they can be integrated into the various building blocks of a diversified allocation, complementing more traditional solutions such as funds or ETFs, with a risk/return ratio tailored to investors' needs.
Last but not least, structuring allows the integration of certain mechanisms specific to this asset class, such as best strikes, which enable the entry point on an underlying to be optimized a posteriori.
When all these building blocks are in place - quality underlyings, appropriate structuring and diversification of payoff profiles - structured products become a genuine allocation-building tool, capable of improving a portfolio's risk/return profile over time.
Your approach to equities is based on price discipline and the creation of economic value. How does this philosophy permeate your broader offering?
Price discipline is central to our approach, on two complementary levels.
Firstly, in our role as anindependent, open-architecture player. We work with around thirty issuers to obtain the best possible structuring conditions for our customers. This competition is essential, as the difference in competitiveness between banks can be particularly marked depending on the timing, the formula or the underlying. The quality of a structured product also depends heavily on its technical parameters.
We also analyze the evolution of market conditions over time to identify windows of opportunity. For example, we are developing volatility radars to identify periods when certain stocks show particularly high levels of volatility relative to their annual history, which can improve structuring conditions.
Price discipline is also at the heart of the research carried out by our asset manager VIA AM. Their financial analysis, based in particular on the restatement of accounting data, provides a different reading of company valuations and economic value creation.
This approach is reflected both in their range of funds and in the structured solutions that can incorporate their research.
Over a full investment cycle, where do you see the real value creation for the end customer?
Over a full investment cycle, value creation is often based on discipline and patience in allocation management.
Financial markets naturally go through upswings, but also periods of correction and volatility. For the patient investor, these are precisely the moments that can create interesting opportunities.
When markets fall and volatility rises, two advantages often emerge: more attractive valuation levels and potentially more favorable entry points for certain strategies.
Value creation therefore depends on the ability to deploy capital gradually and opportunistically, rather than constantly trying to anticipate market movements.
Diversification also remains essential. Combining different strategies and investment horizons helps build portfolios that are more robust to market cycles.
This article has been automatically translated using Breeze, powered by DeepL.