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Strategy Selection: Equity Derivatives - Demanding clients drive tailor-made solutions.

Financial Times Mandate, September, 2007

There are a number of ways that equity derivatives can be adapted to specific user's needs. One is by customising the underlying asset or index which a derivative gives exposure to.

Merrill Lynch's Mr Ypsilanti comments: "Investors want exposure to more specific risks or sectors, such as small or large cap, so are looking for the underlying index to customise. Five or 10 years ago you could only invest in a broad country index in Europe or in single stocks, there was nothing in between. Now clients want to invest in more specific risks, such as sectors, styles, size or themes."

As a result Merrill Lynch has created thematic indices that give access through swaps to themes such as renewable energy or emerging market infrastructure.

The other...

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