Four Categories of Structured Products
Keeping an overview
It is not always immediately obvious which type of structured product is involved with just a product name. UBS has developed a classification structure allowing investors to identify at a glance which category a particular structured product belongs to.
UBS breaks structured products down into four categories, with each category geared to a specific level of potential return and risk. With regard to content, the classifications are in line with the Swiss Structured Products Association (SVSP).
Protection
This category includes solutions that offer partial or complete capital protection and is suited to investors with a low level of risk tolerance.
Optimisation
These solutions enable you to enhance returns when markets move sideways. They are suited to investors with moderate to high risk tolerance.
Participation
This category includes solutions that reflect price trends in the underlying as precisely as possible. Investors can use them to invest relatively small amounts in specific securities or to gain exposure to particular baskets, for example. Such solutions are suitable for investors with moderate to high risk tolerance.
Leverage
These solutions allow investors to use a small amount of invested capital to leverage price trends or hedge a portfolio. Investors in this category must have a strong appetite for risk as well as in-depth knowledge of the financial markets.
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