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Structured Products

Updated on March 6, 2023

A group of investment products which can be customized as per the customer’s need for investing a particular amount and providing protection to the capital invested are called Structured products. The investment products can include a combination of one or more underlying assets or securities like bonds, options, commodities, currency pairs and indices.

What are the components of Structured products?

Structured products have three basic components :
1. Bonds- Bonds are a crucial part of structured products and make them a secured investment product. Bonds help in capital protection and ensure security of principal amount.
2. Equities- Equities are part of these products and help in maximising returns, although with enhanced risk.
3. Derivatives- a derivative is an investment whose value is based upon the value of underlying asset(s). Derivatives help in customizing returns from the underlying assets as per customer’s needs and risk capability.

What are the benefits of Structured Products?

Some of the benefits of structured products include:
a) Potential for risk adjusted returns by combination of different asset classes in a single product
b) Can be customised as per needs and risk profile
c) Capital protection as well as high return options available