What are structured products?

Structured products are a type of investment allowing individuals to invest for a specific period while still obtaining protection on their initial investments. Stocks, bonds, options, indices, commodities, currency pairs, and interest rates are frequently included in this mix of one or more underlying assets or securities.

Why should you invest in a structured product?

A structured product instantly boosts your investment portfolio. There are various financial instruments involved in creating a structured product. Structured products include bonds, equities, and derivatives as the principal assets. Bonds and equities together generate returns which makes structured products great investment options.

What are the returns on structured products?

The returns on structured products are based on the underlying assets and derivatives of those assets. Structured products offer the issuer a source of cheap debt, because instead of paying interest to the investor, the investor gets a return from the underlying derivatives. Structured products have a maturity date.

What are the use cases for structured products?

The use cases for structured products are as diverse as the instruments themselves. Structured products have the ability to hedge against specific risks—such as interest-rate or currency fluctuations—or address more general objectives like ensuring income or enhancing returns.