Structured Notes That Lack Protection to Sell Best, Poll Says

Structured notes that don’t protect investor principal are likely to be the top sellers in the U.S. next year, according to a poll by Incapital LLC.

Thirty-one percent of 94 attendees at the firm’s 2012 Structured Investments Conference in October said securities without principal guarantees would be the “most popular,” according to a survey released yesterday by Incapital, the largest U.S. structured note underwriter that doesn’t issue the securities.

Trailing at 25 percent were principal-protected notes, followed by inflation-linked securities at 19 percent and market-linked certificates of deposit, which are insured by the Federal Deposit Insurance Corp. up to $250,000, at 13 percent.

More education would make structured products more popular with investors, 60 percent of respondents said, while 20 percent cited greater liquidity and 16 percent simpler structures.

U.S. investors have bought $37.3 billion of structured notes this year, 15 percent less than the year-earlier period, according to data compiled by Bloomberg. Data on the structured CD market is incomplete as the investments aren’t registered with the Securities and Exchange Commission and the FDIC doesn’t track market-linked deposits separately.

To contact the reporter on this story: Kevin Dugan in New York at kdugan4@bloomberg.net

To contact the editor responsible for this story: Alan Goldstein at agoldstein5@bloomberg.net

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