Structured products are among the fastest-growing financial vehicles. Their name derives from the fact that they are made up of a variety of different elements. They are always based on an underlying asset, for example an equity, a bond, an index, foreign currencies or commodities such as gold, copper, crude oil or sugar. With the aid of one or more derivative instruments, the right or obligation arises to buy or sell the underlying asset or some other asset at specific terms.
Characteristics of structured products
- Flexible. Various market expectations can be realized
- Individual. The suitable product for any type of investor
- Comprehensive. Access to a wide range of markets, subjects and asset classes
- Liquid. The products can be purchased and sold at any time under normal market conditions
No other instrument meets the individual investor‘s profile and risk tolerance level as precisely as structured products. Whatever market expectations investors may have, structured products allow implementing a corresponding strategy. Read more about the four categories of structure products.
Structured products give you certain claims against the issue, which is why issuer quality is so important. Risks vary depending on the type of product used. Some structured products are more suited to investors with a small appetite for risk, whereas others carry more risk. It is important that you understand the risks involved with a specific product and its underlying, and that you discuss these with your client advisor.
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