Like all investment products, there are pros and cons to structured investment products. They might be right for you if:
- You don't mind the risks associated with stock market linked products
- You want the reassurance of part or all capital protection
- You can afford to keep your capital locked away for between one and five years
However, structured investment products may not be right for you if:
- You may need access to your capital at any time
- You want a fixed term investment
- You do not want the risk associated with a stock market linked product
So, whether structured investment products are right for you will depend on a number of factors, including your attitude to risk.
The safety of your original capital depends on the ability of the counterparty (the institution providing the underlying assets, rather than the product provider) to repay your investment at the end of the term. You can assess the strength of a counterparty, and therefore the relative risk to your investment, by comparing their credit rating score, from AAA to D, using a credit rating agency such as Standard & Poor's (www.standardandpoors.com) or Fitch (www.fitchratings.com).