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 ?
Due to the fixed term of a structured product, investors face higher exit charges if they wish to leave a product early.
Hong Kong Exchanges and Clearing Limited (HKEX) is pleased to announce the launch of Inline Warrants in July, further enhancing Hong Kongs structured product offerings.
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Following an Australian Securities and Investments Commission investigation, Citigroup will refund over A$3M to 114 retail customers for losses arising out of structured product investments offered by Citigroup between 2013 and 2017.
A structured product is a kind of fixed-term investment whose pay-out depends on the performance of a specified asset, like a stock market index.
Summary: Future Market Insights has announced the addition of the "Structured Product Label Management Market: Global Industry Analysis and Opportunity Assessment, 2016-2026"report to their offering
It will also expand Markit's customer base among regional banks and structured product issuers.
The 10:10 Plan is the only structured product available on the retail market with a maximum 10 year investment term.
It is important for investors to thoroughly understand the underlying asset or index to which a structured product is linked.
Britain's Financial Services Authority (FSA) said on Wednesday it had slapped the penalty on Rameshkumar Goenka for artificially inflating the closing price of Reliance GDRs in 2010 to avoid crystallising losses on a structured product.

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