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 ?
Within the last few years, Seabury Capital has expanded its portfolio by investing in early stage startup companies within the financial technology industry and structured investment products.
These include commercial and corporate banking, wealth management, structured investment products and project financing facilities".
In addition, we plan to further broaden our product and service range to include commodity-related hedging facilities and credit-related structured investment products.
Incapital said it has strengthened its wholesale offerings of structured investment products, including notes and market-linked CDs from leading issuers, into new distribution networks.
In-House Structured Securities Group - This initiative establishes an in-house structured securities group to support the current modeling of structured securities and would allow the NAIC to expand analysis into more complex structured investment products.
Atlas Financial Group offers a portfolio of services that includes International Life Assurance, titled 'Atlas Life' and Structured Investment Products together with Offshore Banking Services, Company and Trust Services and Corporate Risk solutions.
Loss-making Swiss bank EFG International is in talks with potential buyers for all or part of its French business and hopes to float its structured investment products business later this year as part of its radical overhaul.
Neither are you going to spend hours looking at the best buy tables and comparing the long-term risk-adjusted results of unit trusts to derivatives-based structured investment products.
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.
For instance, in in developed markets like the US, indirect property owners, who own small shares of buildings through structured investment products or limited partnerships, real estate investment trusts ( REITS), private equity funds or stocks in realty firms are asking their real estate asset managers to enhance property energy efficiency.
This was largely due to: (1) losses in banks' investment portfolios, given their exposure to structured investment products in international markets, (2) impairments of goodwill related to regional acquisitions and (3) higher provisioning to safeguard banks' balance sheets against asset price deflation in their investment portfolios.
With the structured investment products now nearly worthless after Lehman Brothers' collapse, investors have urged NBF to repurchase the products at a price equal to the principal amount.

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