access
Built-in protection
Unique choices
Wide distribution network
Bright outlook
Mike Phlaum
products around clients' needs, while at
the same time providing RNA with
attractive funding possibilities.'
Generally speaking, investors with a
higher risk-reward profile choose to
invest in stocks, accepting the possibility
of losing value on their investment in
return forthe potential of higher returns
when stocks rise. Those who want to see
regular income from their investment
tend to select Fixed Income products.
Structured products can be principal-
protected or non-principal protected,
depending on the level of risk or reward
investors wish to have. 'Certificates of
Deposit (CDs) issued by RNA are a
principal-protected product whose
credit-worthiness is further enhanced by
FDIC (United States government)
insurance/explains Heuskes.
FDIC insurance guarantees investors
against loss of principal up to an
amount of US$ 100,000 in case of
default by the bank. 'Structured
products issued by RNA in the United
States, therefore, benefit from the level
of comfort this offers our American retail
investment clients,' says Heuskes. The
FDIC insurance is of importance to
RNA's clients, since RNA, as a non-
guaranteed wholly-owned subsidiary, is
not explicitly rated Triple-A.
'What we do is arrange structured
products offering different mixes of
criteria, allowing clients to choose
different periods of investment and
different risk-reward ratios.This provides
them with the potential of up-swings
together with the level of protection they
want,' says Heuskes. 'Income can come
from a recognised equity index, such as
the Dow Jones or Standard Poor's, or a
fixed income coupon enhanced with a
callable feature. We can create inflation
and commodity-linked products, and
basket structures incorporating any
combination of the above.'The returns
are paid out periodically or on maturity of
the product, which can vary from one to
20 year periods. 'It's important to look at
specific customer groups, so that we can
design specific products to match their
needs,' says Heuskes.
Asset growth for RNA through structured
products has been significant, and the
access provided by GFM to the huge
wholesale distribution network of broker
dealers throughout the United States has
been important in funding this growth.
'Working with our colleagues in GFM, we
issue a variety of new structured products
every month that are sold through the
wholesale distributor network/ says Mike
Phlaum of RNA in Palm Springs. 'With the
introduction of structured CDs, our reach
is greatly increased. And of course, that
means the Rabobank name is fast
becoming much better known and
recognised, further supporting investor
confidence in our products.'
'We've been able to put sophisticated
product knowledge to work to raise
deposits throughout the United States,'
says Heuskes. 'Our structured products
business in European markets has seen
explosive growth over the last six to
seven years. We've already raised over
US$ 300 million for RNA in the United
States since May 2005, one third of which
is Index-linked investment, the rest Fixed
Income products. Given this strong initial
growth, we think there's a very bright
outlook for the future.'
