Structured products are complex financial instruments that combine traditional investment assets with derivatives to create a customized investment solution. These products are designed to meet specific investment objectives, offering tailored exposure to a variety of asset classes, such as equities, bonds, currencies, or commodities.

Key Features

1. Customization: Structured products can be tailored to fit the investor’s risk tolerance, investment horizon, and financial goals. This customization often involves combining a standard investment with options or other derivatives to achieve a desired payoff profile.
2. Risk Management: They can offer built-in mechanisms for capital protection, periodic income, or enhanced returns, depending on the structure. Investors can choose products with varying levels of risk and return profiles, providing flexibility to match individual investment strategies.
3. Diverse Strategies: Structured products can be designed to benefit from specific market conditions, such as rising or falling asset prices, volatility, or interest rate changes. This allows investors to gain exposure to market movements or hedge against risks.
4. Complexity: Due to their intricate design, structured products can be more complex than traditional investments. They often require a thorough understanding of the underlying assets and the specific terms of the product.