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 ?
The first ever $1bn structured investment vehicle to channel investments in Lebanon's energy and infrastructure projects is expected to be unveiled by FFA Private Bank.
A good example of a Structured Investment on offer that can produce gains over the medium term, even if stock market falls is the Investec FTSE 100 Step Down Kick-Out Plan.
The agreement is intended to consolidate Goldman Sachs' structured investment offerings and Motif Capital's systematic and transparent approaches to thematic investing.
Fundamentally, the Structured Commodity Fund proposes to utilize controlled, well-directed, regimented and structured investment procedures that accentuate expansive exposure among commodity sectors.
Morgan Stanley and Company, Bank of New York Mellon and three securities ratings services are named in the suit, for allegedly rating too highly a structured investment vehicle that collapsed last year during the global credit crisis, Bloomberg said.
Structured investment products provide other opportunities for Latin investors.
An investor buying a structured investment that offers a defined return of, say, 60% after six years if the FTSE is above where it is now, gives the investor a good potential margin on inflation.
Swedish investment bank Carnegie has said that it has recruited 40 employees from HQ Bank to strengthen its activities in private banking and structured investment products in Sweden.
HGK provides equity, fixed income, balanced and international, individually structured investment portfolios.
NEW YORK -- Derivative Fitch held a webcast earlier today to provide its most recent performance update and Rating Outlook on the global structured investment vehicle (SIV) market.
HSBC Holdings (LSE: HSBA) has announced that it has launched the four-Year MYR Equity Linked (Hang Seng Bank Ltd) Structured Investment.
Since inception, the Funds have employed a top-down, disciplined and structured investment process that emphasizes broad exposure and diversification among emerging market countries, economic sectors and issuers.

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