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 deposits rates over long periods of history. Investors employ Structured Investments for a variety of reasons including:
- Enhancing income
- Protecting capital
- Capturing growth
- Tracking a market
- Take advantage of falling markets
- Benefit from range-bound markets
- Accessing restricted markets
They are very flexible and can be tailored to suit the investment objectives and risk appetites of investors. Depending on the structure, the owner will receive the return as an income over the life of the investment or as a lump sum at maturity.
Structures may take the form of deposits, notes, warrants or funds. Structured deposits have similar features to other structured investments but take the form of a deposit. In common, with other types of investment such as shares, they may be traded on a daily basis.
They may be held directly or depending upon the features of the solution may be held in tax efficient savings accounts, funds, pensions, insurance bonds and via a platform.