What role do retail structured products play in a healthy, balanced portfolio?
Retail structured products are a complement to traditional portfolio investing, not a substitute. These products may be utilized by financial advisors and individual investors to manage portfolio volatility, gain access to asset classes that may be difficult or uneconomic to invest in directly, or achieve specific investment objectives by incorporating features such as leverage or principal protection. Since retail structured products are generally rule-based-meaning that there typically are a predetermined range of potential outcomes-they may assist financial advisors in designing portfolios more closely aligned with an individual investor’s needs. Q: Structured products have been popular in Europe since the 1990s but are relatively new here. Are they getting more popular and why? A: Yes, but there has been a learning curve. It is imperative that financial advisors and individual investors understand the risks and benefits of investing as well as both the return profile of these produ
