Actively Managed Certificates have been employed in a wide range of real-world scenarios, showcasing their versatility. Below we explore some use cases and illustrative case studies that demonstrate how Actively Managed Certificates (AMCs) are being used, the kind of performance they have delivered, and trends in investor demand.
1. Replacing Private Funds for Niche Strategies: Many asset managers use Actively Managed Certificates (AMCs) to launch strategies that would traditionally be in a hedge fund or private fund format. For example, consider a diversified multi-strategy hedge fund portfolio that a bank wants to offer its clients.
2. Thematic Portfolios and Dynamic Equity Strategies: Actively Managed Certificates (AMCs) are frequently used to express investment themes. For instance, an asset manager might have expertise in biotech stocks and wants to actively manage a basket of biotech companies. Instead of starting a biotech fund, they launch an AMC. This was done by several managers during the biotech boom – the Actively Managed Certificate (AMC) allowed them to actively rotate among biotech names, take profits on spikes, and manage risk by shifting into cash or larger pharma names when needed. Another theme could be ESG (Environmental, Social, Governance): an Actively Managed Certificate (AMC) could hold a basket of high-ESG-scoring stocks and allow the manager to actively tilt the portfolio based on sustainability trends or to engage in impact investments. Investor demand for such thematic Actively Managed Certificates (AMCs) has been robust, especially among wealth management clients who want exposure to trending sectors but with professional oversight. It’s common to see these listed on structured product exchanges where both retail and advisors can invest fairly easily.
3. Bespoke Solutions for Wealthy Individuals: Private banks often use Actively Managed Certificates (AMCs) to implement tailored strategies for a single large client or a small group of clients. For example, if a client has a specific view or desire – “I want a conservative, income-generating portfolio, but I also want to include some private credit loans” – a bank can craft an Actively Managed Certificate (AMC) that does exactly that. The Actively Managed Certificate (AMC) might hold a mix of bonds, dividend stocks, and maybe a slice of a private loan fund, actively managed to maintain a certain yield and risk level. This is effectively a custom managed account, but by using an AMC, the client’s assets can be handled in a standardized, reportable way and even split into notes for their different family members or entities.
4. Track Record Incubation / Pre-Fund Strategy: Many emerging fund managers use an Actively Managed Certificate (AMC) to build a track record. This use of Actively Managed Certificates (AMCs) as incubators has become quite common. It’s reflected in demand from the manager side: the number of Actively Managed Certificate (AMC) issuers catering to such external managers has grown, indicating a trend where more strategies are “born” in Actively Managed Certificates (AMCs). In terms of investor outcome, those early investors got hedge-fund-like strategy access in a simple note and benefited from the returns (with liquidity to boot). Some might stick with the Actively Managed Certificate (AMC) even after a fund is launched if the Actively Managed Certificate (AMC) continues to perform.
5. Retail Structured Product Alternative: In markets like Italy, listed “certificati” (certificates) have become popular with retail investors as an alternative to funds or direct stock picking. A subset of these are Actively Managed Certificates (AMCs) where a known asset manager’s strategy is wrapped for mass distribution. The success of some of these products can be seen in turnover volumes.
6. Performance and Benchmarking: In terms of performance metrics, it’s important to note that Actively Managed Certificates (AMCs)’ performance varies widely depending on the strategy (just like funds).
Investor Demand Trends: Investors – both institutional and high-net-worth – have been increasingly allocating to Actively Managed Certificates (AMCs). One trend is that external asset managers (independent advisors) use Actively Managed Certificates (AMCs) to implement their model portfolios for multiple end-clients. Instead of managing dozens of separate accounts, an external manager might run one Actively Managed Certificate (AMC) and put all clients in it (or a few Actively Managed Certificates (AMCs) for different risk profiles). This not only makes the manager’s life easier, but banks encourage it because it brings that manager’s activity onto their platform. As a result, the number of external managers using Actively Managed Certificates (AMCs) is rising.
From the perspective of volumes: anecdotal evidence suggests that assets in some individual Actively Managed Certificates (AMCs) have grown quite large when the strategy proves itself. It’s not unheard of for a successful Actively Managed Certificate (AMC) to accumulate $1b+ if it’s open-architecture (multiple investors can join).
Case: Delta-One Desks and Actively Managed Certificate (AMC) Usage: Delta-one trading desks (which handle equity swaps, ETFs, etc.) have found Actively Managed Certificates (AMCs) useful to hedge or express strategies. Instead of entering a total return swap on a bespoke basket (which requires ISDA documentation per client), a bank’s client might just buy an Actively Managed Certificate (AMC) that mirrors that basket – easier operationally. Some hedge funds have even bought into other banks’ Actively Managed Certificates (AMCs) as a quick way to get exposure to a strategy (essentially outsourcing part of their strategy management). This cross-usage underscores that Actively Managed Certificates (AMCs) are becoming a standard instrument type, not limited to any single investor class.
Measured Outcomes: Ultimately, the success of Actively Managed Certificates (AMCs) as use cases is measured by investor satisfaction (returns relative to expectations, ease of use) and issuer objectives (assets gathered, revenues). So far, case studies indicate that investors appreciate: the transparency (they often know what’s going on inside the AMC), the agility (the manager can navigate crises – e.g., some Actively Managed Certificate (AMC) managers went to cash before the 2020 crash and bought back in, moves that a static product could never do), and the convenience. Issuers and managers appreciate that it’s easier to corral clients into one vehicle and manage risk centrally.
One notable trend in demand is that of family offices and small institutions adopting Actively Managed Certificates (AMCs). Because these investors often need tailored solutions but have bureaucratic hurdles to investing in external funds (or don’t meet certain fund minimums), an Actively Managed Certificate (AMC) issued by a reputable bank can be a neat solution. We see, for instance, family offices in Asia requesting Actively Managed Certificate (AMC) structures for strategies they like, which are then issued via Singapore or Swiss platforms.
In conclusion, the variety of case studies – from core investment solutions (like the hedge fund portfolio AMC) to highly specialized themes (like crypto or ESG) – shows that Actively Managed Certificates (AMCs) have truly broad applicability. Performance outcomes have generally tracked the underlying markets and manager skill: some Actively Managed Certificates (AMCs) have delivered excellent risk-adjusted returns, validating the format, while others have had middling performance (as is normal in active management – not all managers outperform). Importantly, the format itself has proven robust in different market conditions, and investor demand trends upward as familiarity grows. Real-world usage has cemented Actively Managed Certificates (AMCs) as a permanent fixture in the toolkit of structured product desks, asset managers, and investors alike. They fill the gap for “bespoke active strategy” in a way that nothing else currently does with the same convenience. Each year brings new examples of how Actively Managed Certificates (AMCs) can be applied, which in turn draws in more users and further innovation – a positive feedback loop evident in the expanding case history of Actively Managed Certificates.