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Structured products to buy today

Structured products can protect your capital from market falls but some advisers think the risks are too high
May 7, 2014

After double-digit returns from equities in 2013, all bets that the FTSE 100 will break through the 7000 barrier seem to have been put on hold, with many investors expecting the traditional fall in the market over the summer. And while structured products can protect against market falls, advisers are divided on whether now is a good time to buy a structured product for your portfolio.

Structured products are investments backed by a counterparty where the returns are defined by reference to an underlying measurement such as the FTSE 100, with returns delivered at a defined date. They aim to provide some protection against market downside and achieve a defined outcome which could be useful for financial planning. Some products are growth orientated, and some focus on income, and with the latter investors hope to get a regular income and defined outcome.

Some structured investments offer the chance for better returns than investing directly in the market. Investors in structured products that matured in April comfortably beat the FTSE 100 index (see table below). They could be used, for example, in drawdown by building a portfolio of products that mature every year so you get an annual payout. They could also be used in this way for school fees.

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