6 good reasons to buy structured products.
1. The luxury of customized investment
Like many high-end products, structured products offer the huge advantage of being customizable based on your specific and personal risk tolerance. Here there are no fabrics or colours to choose, as it is the case when tailoring a suit or decorating a home… However, there are several other criteria:
- The desired level of risk: guaranteed capital, downside protection, leverage…
- The structure of the product: underlying, maturity, currency, target return.
- The product mechanisms: autocallable, bonus certificate, barrier reverse convertible.
Tailored does not mean that you have to create complex structured products! Do you have a payoff objective? Build your product around it.
2. Portfolio Stabilizer
One advantage of the structured product is that it lowers the volatility of your portfolio. In the majority of scenarios, and whatever the development in the market, your portfolio is more stable. A structured product can exploit the increase in an underlying, while protecting you against the high volatility of this same underlying. You benefit from controlled return and protection: more peace of mind for you, and increased stability for your portfolio.
3. Controlled returns
Within a low rate environment, structured products offer a unique way to find more worthwhile returns at reduced risk to your capital, and to transform a long-term investment into a regular generator of revenue (several times per year).
They also allow you to balance the risk/return ratio exactly as how you want to, and to determine the frequency of coupon payments throughout the entire lifespan of the product, or even to predetermine the maturity of a product based on your cashflow requirements. A product with guaranteed capital offers secure returns, with the focus being placed on increased stability.
A product with protected capital, on the other hand, allows you to recover all or part of the invested capital upon maturity, with an unlimited return in the event of an increase in the underlying. If the underlying falls, you may lose a controlled proportion of the invested capital.
Finally, all structured products allow you to optimize your tax affairs, by determining maturities based on their returns, in accordance with the legal provisions that you are reliant on.
4. Infinite diversification
You have the possibility to create an infinite number of products and, as such, to diversify your portfolio in a unique way. All raw materials, all currencies, all markets… Both the most traditional underlyings and the more complex are available to you. You can even create your products with foreign underlyings in the currency of your market, without affecting the desired exposure.
5. Explorer of new markets
Would you like to take advantage of all of the opportunities that the financial markets offer? To be able to invest in underlyings all around the world? Would you like to create a product based on a high-potential, non-listed company?
6. Win in every respect
Structured products allow you to create "multidirectional" investments, which no direct investment would allow. Then, within certain limits, you would be able to win on an increase, but also on a decrease in an index, by creating a customized structured product with the Privatam teams. And unlike numerous investments that lock up capital, structured products benefit from enhanced liquidity.