It was the way in Asia last year, that all you needed to do was to offer investors a structured product stylised as an accumulator, and watch the money roll in. It was one of the two ways in 2007 to ‘make a killing’ in structured products in the region. In true derivatives fashion, everyone was a winner so free (or at least fee-based) money for all.
This year all change. The same product is on offer – you can still buy accumulators of a sort. As a matter of structural accuracy, it is fair to say that the product now on offer is the opposite of the one in the open market last year – this year’s favourite is the deaccumulator.
The fact that the structure has been turned on its head tells you the story of what people now think of the accumulator – they don’t like them and they don’t want them. So much so that the structure has adopted a new name based on the phonetics of the original. Rather than the 'Acc-um-u-lator', Asia has now coined the same structure the ‘I-Kill-U-Later’. The joke kind of works, and offers a token solace to those that have watched their investments go down, as well as down just a little more.