U.S. Note Sales Slow in Quarter as Volatility Falls

Third-quarter sales of structured notes in the U.S. fell to the lowest this year as a new round of quantitative easing and the lead-up to the November presidential election damped market volatility.

Investors bought $9.37 billion of the securities, down 4.3 percent from the previous quarter, according to data compiled by Bloomberg. It was the second-lowest three-month period for issuance since at least the beginning of 2010, exceeding only the $8.6 billion sold in the fourth quarter of last year.

The Federal Reserve’s announcement of an open-ended bond buying program and investors adopting a wait-and-see attitude before the presidential election contributed to lower volatility, said Scott Miller Jr., a managing partner at Blue Bell Private Wealth Management LLC. When assets are less volatile, the options embedded in certain types of structured notes are cheaper, hurting the ability of issuers to offer enticing features.

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