Retail investor can look forward to wider access to credit derivatives

PIPS

While the debt markets are typically more suitable for professional investors because of their complexity, this will not always be the case and retail investors can look forward to simpler products coming on stream as the market begins to open up

The international capital markets have developed the concept of asset backed securities over a number of years, and the latest innovations using credit derivatives are now a common instrument for institutional investors. The concept is simple in that it allows an investor to gain exposure on the ability of a company or government to pay its debt without actually having to own the debt itself. Conversely it also allows an investor to protect themselves from the credit of an issuer whose debt they hold in their portfolio. In practice it can be extremely complicated to analyse these product...