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How safe are structured products?

FEATURE: An opaque investment vehicle to steer clear of, or a sure way to combine equity growth and capital protection? The jury is still out on structured products.
June 15, 2009

Last week's news that structured product provider, Keydata Investment Services had been placed into administration, sent out a few shockwaves - and not only to the 80,000-plus investors who had put their money into the company's plans. Structured products appeal to investors at times of uncertainty - offering participation in the upside if markets take off, and protection from the downside if they bomb. There have been a plethora of new product launches and sales have surged, with investors, independent financial advisers (IFAs) and even fund managers seeking them out.

While there are still some serious questions around the transparency, and security of these products, some believe there is an argument to be made for the role of structured products in delivering efficient, risk-adjusted returns. So should you be considering structured products?

A tainted history

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