What is a structured investment option?
The Structured Investment Option (SIO)1 is an investment option available within certain EQUI-VEST® series of variable deferred annuities. The SIO enables you to seek growth, up to a limit, with some downside protection.
What are examples of structured products?
Structured products are financial instruments whose performance or value is linked to that of an underlying asset, product, or index. These may include market indices, individual or baskets of stocks, bonds, and commodities, currencies, interest rates or a mix of these.
What are structured derivatives?
Structured derivatives refers to a group of financial instruments with varying terms, payout and risk profiles on a range of underlying assets. Structured derivative is an instrument that derives its price in a non-linear way from multiple derivatives and/or multiple cash instruments.
Are structured products high risk?
A Structured Product is a hybrid investment made up of a bond and an option. They offer the potential for higher returns on investment compared to a standard deposit. Structured products are low risk investment and possibly receive up to 100% capital protection.
What is the benefit of structured products?
Structured products offer a range of possibilities allowing investors to tailor their exposure to various markets and the potential to make a return in all types of market conditions, with products which respond to falling or rising markets in periods of high or low volatility.
Who invests in structured products?
investment banks
Structured products are created by investment banks and often combine two or more assets, and sometimes multiple asset classes, to create a product that pays out based on the performance of those underlying assets.
What are structured products and how do they work?
Structured products are investments which provide a return based on the performance of an asset. This asset can cover the equity, index, fund, interest rate, currency, commodity or property markets. The payoff and level of capital at risk can be pre-defined.
How do banks make money on structured products?
Banks do get paid an upfront fee to create and issue structured notes, that’s part of the transaction cost. And that’s where banks want to make their money. As such, banks will hedge their risk, often in exchange traded markets (like vanilla options) for their book of structured notes.