Some 78% of all thematic sales volumes in 2022 was invested in indices with a decrement feature.

An estimated US$2.7 billion was collected from approximately 475 structured products linked to thematic indices in 2022 – down four percent by sales volume compared to the previous year (2021: US$2.8 billion from 500 products).

Some 91% of all sales (US$2.5 billion) came from products targeted at investors in Europe – up from 83% in 2021 – with the remaining €0.2 billion equally split between Americas and Asia Pacific.

The main index providers in the thematic segment in 2022 were Qontigo, Solactive and MSCI, with a market share of 30%, 23% and 16%, respectively.

Thematic indices with a decrement feature have steadily increased their market share, mainly at the expense of price indices. The former captured only five percent all sales linked to thematic indices in 2019, but by 2022 their market share had increased to 78%. At the same time, the share held by price indices went the other direction: from 95% in 2019 to 20% in 2022.

Market share for risk control indices, the third type, remained stable during 2019-2022, peaking at 4.8% in 2019.

The best-selling thematic index in 2022 was Qontigo’s Euro iStoxx 50 Future Healthcare Tilted NR Decrement 5% EUR, which tracks all the Eurostoxx 50 securities, and the 10 largest securities form the Stoxx Global Breakthrough Healthcare Index, whilst assuming a constant five percent performance deduction per annum. It was utilised by Intesa Sanpaolo as the underlying for three products targeted at Italian investors that collected a combined US$411m.

Another index that sold well was the MSCI World Health Care Select ESG Top 50 5% Decrement Index (US$317m). It was used by Natixis in France and by Morgan Stanley in Belgium and Sweden.

Bloomberg’s Luxury 2021 Decrement 50 Point EUR Index was seen in 47 products (US$214m) that were exclusively sold in France while the Solactive Europe & US Top Pharmaceuticals 2020 AR 5% (US$207m from 37 products) was available across five different jurisdictions, including Finland, France and Germany.

The highest issuance came from MerQube’s US Tech+ Vol Advantage Index, which was used in 246 products issued via J.P. Morgan in the US, although sales, at US$74m, stayed somewhat behind.

The Thematic/Decrement chapter of SRP’s Index Report 2023 will be available soon. The ESG and Market Cap/Industry Sector chapters are available for download here.