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Cape Town - A structured investment product is an investment that provides a defined investment outcome, based on pre-agreed parameters, over the term of the product.
Japie Lubbe of Investec Structured Products explains that structured products typically provide returns lined to the performance of an underlying asset or benchmark. Examples of such underlying benchmarks could be equities, commodities, interest rates and even foreign exchange rates.
Structured products provide the investor with the ability to tailor their returns to provide capital growth, income or a combination of the two, says Lubbe.
Structures products typically provide some form of capital protection.
These products can be used in the planning for certain financial goals, for instance, retirement or the payment of university fees.
They generally have a fixed term, so the exit date is known, says Lubbe.
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