Structured product


Also found in: Wikipedia.

Structured product

Structured products are investment vehicles based on a basket of underlying securities, such as derivatives, equities, debt issuance, commodities, indices, currencies, or any combination thereof. See: Debt instrument, Asset allocation decision, Structured finance

Structured Product

Any investment vehicle where the return is linked to the performance of an underlying index. For example, an exchange traded fund is a structured product that a company puts together using all the stocks that trade on a particular exchange. It compiles all the stocks and issues its own shares representing those stocks. These shares can be traded as if they were stocks. Many structured products are known by acronyms; for example, SPDRs are common structured product shares. See also: Rule 434.

Structured product.

Financial institutions create investment products, known generically as structured products, that trade on a stock exchange and link the return on an investor's principal to the performance of an underlying security, such as a stock or basket of stocks, or to a derivative, such as a stock index.

For example, the return on debt securities known as structured notes is determined by the performance of a stock index such as the Standard & Poor's 500 (S&P 500) rather than the market interest rate. The objective is to provide the potential for higher returns than are available through a conventional investment.

Each product has a distinctive name, often expressed as an acronym, and its terms and conditions vary somewhat from those offered by its competitors.

For example, in some cases the principal is protected and in others it isn't. But some features are characteristic of these complex investments -- their value always involves an underlying financial instrument and they require investors to commit a minimum investment amount for a specific term, such as three years.

References in periodicals archive ?
The Toolkit has five sections with 15 regulatory tools that are organised along the value chain of the retail structured product market, from issuance to distribution to investment.
5) We describe how credit risk is incorporated into each type of structured product valuation method, allowing practitioners an informed choice of valuation approaches.
The derivative components of a structured product are taking simple bets about whether the underlying assets will rise or fall.
Ben Wilder has been named director, senior structured product sales.
The taxation of a structured product will depend on the tax treatment of its individual components.
Should a bank wish to sell a structured product to its customers, it will have to submit to the Central Bank a written request with the relevant details and the rationale for asking an exemption to this rule.
An alternative form of investment, however, that has gained popularity over the past couple of years is a structured product.
The award for Technology Innovation, which was announced in the September issue of Structured Products Magazine, was presented to Numerix at the Structured Product Asia Award Ceremony on September 13th at The Renaissance Hong Kong Harbour View Hotel.
I think it is very important to limit or at least approve the type of structured product, especially here because at the retail level, the commercial banking licence is very wide and open ended.
Methodology: Between October and November 2011, Greenwich Associates conducted interviews with 116 retail structured product distributors in Asia to better understand product demand, distributor preferences and the competitive landscape.
It will also expand Markit's customer base among regional banks and structured product issuers.
Advisors Asset Management (AAM) said it has appointed Robert Sowinski and Nicholas Scarpello to the firm as it expands leadership to its structured product group and grows the capital markets team.

Full browser ?