The safety of your original capital depends on the ability of the counterparty (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).
Structured products offer a number of advantages if:
- You want to invest in a product which tracks an index, such as the FTSE 100
- You don't mind putting some or all of your capital at risk for potentially higher returns (capital-at-risk products)
- You want to protect some or all of your investment from volatility (capital protected products)
- You can lock your money in for several years over the term of the investment
- You want access to a wide range of assets and markets
But there are also drawbacks to structured investments if:
- You are not comfortable with investments which depend on potentially volatile assets, such as the stock market
- You think you might need access to your cash within the fixed term
- You want guaranteed returns on your investment
- Your investment funds do not reach the minimum investment required
Always check the small print of a structured investment product to see what the rating of the counterparty is, as well as that of the product provider, as this can help determine the level of risk.
Compare some of the leading structured investment products using our free online comparison service and apply for more information to see if it suits the needs of your investment portfolio.
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).