Are structured investment products capital guarantees in volatile times? | The Citizen

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Are structured investment products capital guarantees in volatile times?

In a time of market uncertainty and volatile equity markets, many investors are looking for stability in their returns.

“Simply put, structured products should be increasing expected returns on a portfolio without increasing the risk. Alternatively, they should be maintaining the expected return while actively decreasing the risk.”“Market conditions in which structured notes are appropriate may vary. Sometimes you have short periods of high volatility, then you need to capitalise on that volatility. But in doing so, you still need to consider what the client’s needs are.

Considering that fee disclosures on these products are still evolving, Strydom says investors must be cautious around the cost structures of these products.

 

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