Banks battle for index-linked trade

A welcome contribution to the diversity and liquidity of the European credit market? Or just a way for new-issue houses to make money at a time of scarce supply? Two new index-linked products launched by Morgan Stanley and JPMorgan – which offer investors broad exposure to the euro credit market through a single security for the first time – are drawing mixed reviews.

First up in early March was Morgan Stanley’s Euro Tracers product – a e510 million ($448 million) offering that provides fund managers with exposure to 30 euro-denominated bonds of at least e1 billion in size.