Tag Archives | Definitions

Risks of Structured Investing

Whilst there are many benefits of structured solutions, there are also risks associated with purchasing them that often mirror those of other investments. Below is a table showing some of the risks that might be associated with a structured investment and some potential mitigating factors. Investors who are not sure whether a structured investment is […]

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What is a structured fund?

Funds are types of collective investment scheme that pools money from many investors to purchase securities. They are often available to the public, governed by regulations and managed by investment professionals. Funds may invest in equities, bonds, cash and depending on the type of fund derivatives, commodities and property. Structured funds share many of the […]

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What is a structured deposit?

A traditional fixed rate deposit pays a fixed interest rate at the end of a pre-agreed period. A structured deposit works the same way except that the interest rate varies with the price of an asset. The asset may be a basket of equities, index, fund, currency, commodity or property market. For example, a five […]

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What are structured notes?

A structured note is a type of bond issued by a bank or a company. A traditional bond repays the principal invested at maturity and a fixed or variable interest rate during its life. Whereas, the interest rate or repayment amount for a structured note is determined by reference to the price of an asset. […]

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What are covered warrants?

A traditional warrant is a security issued by a company whereby the owner has the right to buy shares in that company for a fixed price (the strike price) on a pre-agreed date (the expiry date). The purchaser pays a premium for the warrant and the maximum loss is limited to this premium. Whereas, the […]

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What are options?

An option is a contract between two parties whereby the owner acquires the right to receive (a Call Option) or deliver (a Put Option) an asset at a pre-agreed price (the Strike Price) or the cash equivalent of the difference between the Strike Price and value of the asset (the Determination Price), upon a pre-agreed […]

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What structured investments are

An investment that pays a return based on the performance of an asset. The asset may be an equity, index, fund, bond, currency, commodity or property market. The term of the investment can run from one month to ten years or more. The rationale for investing in those assets being that historically they have outperformed […]

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