Structured product


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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 ?
Robert Sowinski joins AAM as Managing Director of Structured Products and has an extensive background in multi-asset origination, packaging, pricing, tactical sales and client development, and brings to his role expert global insight and a keen understanding of the structured product universe.
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.
With fixed interest investments delivering low returns and stock markets unpredictable, one of the vehicles that can be useful in spreading risk and balancing an investment portfolio is a structured product.
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.
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.
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.
Black Diamond"), a leading alternative asset management firm with over $8 billion in assets under management, today announced the appointment of Jerome Shapiro as a Managing Director and Structured Product Portfolio Manager.
Investec Bank plc, is regarded as a related party of the Company under the Listing Rules of the UK Listing Authority and, therefore, an investment by the Company in such a Structured Product would be a related party transaction and requires the prior approval of shareholders of the Company ("Shareholders").
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.
An alternative form of investment, however, that has gained popularity over the past couple of years is a structured product.

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