Structured investment products offer access to stock exchange linked returns, with the added benefit of partial or whole capital protection, through derivatives, fixed income products and equities.
If you are thinking about investing, structured investment products could be right for you if:
- You want to make the most of your tax efficient ISA and SIPP allowances
- You would like some or all of your capital to be protected
- You can afford to keep your money locked up for between one and five years
- You want a fixed term investment which allows for planning
However, like all investments, structured investment products are not right for everybody. You may not be interested in structured investment products if:
- You need instant access to your cash
- You want a guaranteed rate of return
- You want the option to invest regularly
- You do not want an share index linked investment
Other important aspects of structured investment products to look out for include the counterparty, which is the investment bank responsible for the derivatives with the investment. The higher the counterparty's credit rating, the lower the risk (the highest credit rating is AAA).