FAQs Archive - YiELDEN Structured Products & Certificates in Europe & Switzerland. Comprehensive comparison tool and much more. Free Databases.

Q: I'm uncertain about the advantages or what I should be seeking when considering an investment in Structured Products or Certificates. Could you clarify?

Structured Products and Certificates offer potential benefits such as customized risk/return profiles, exposure to various asset classes, and potential for enhanced returns or capital protection. The potential for enhanced returns or capital protection in Structured Products and Certificates is achieved through their unique design, which often combines multiple financial instruments. Enhanced returns may result from leveraging, participation rates, or by investing in specific market segments. Capital protection, on the other hand, can be provided through principal protection features or risk-management strategies, ensuring that a portion or the entire initial investment is protected against potential losses. However, it's important to note that these features may come with trade-offs, such as lower returns or limited upside potential.When investing, consider factors such as your risk tolerance, investment objectives, product complexity, fees, and the issuer's creditworthiness.

Q: What is the impact of leverage on the risk-return profile of structured products?

Leverage can amplify both the potential returns and risks of a structured product. Leveraged products can offer higher potential returns if the underlying assets perform well, but they can also lead to greater losses if the assets perform poorly. Investors should carefully consider the leverage level and its impact on the product's risk-return profile.

Q: What are the main types of underlying assets in structured products?

Structured products can be linked to a wide range of underlying assets, including stocks, indices, bonds, commodities, currencies, and interest rates. Some products may also be linked to more complex or alternative investments, such as hedge funds, real estate, or private equity.

Q: What are the main factors that influence the pricing of structured products?

The pricing of structured products is influenced by various factors, including the performance of the underlying assets, market volatility, interest rates, credit risk, and issuer-specific factors. Additionally, fees and other costs associated with the product can also impact its price.

Q: How do structured products handle early redemptions?

Early redemptions in structured products may be allowed under certain conditions, such as investor requests or specific product features like callable options. In the case of early redemption, the investor may receive the current market value of the product, which could be higher or lower than the initial investment, depending on market conditions and the product's structure.

Q: What is the role of a distributor in the context of structured products?

A distributor is a financial institution or intermediary responsible for marketing and selling structured products to investors. Distributors can include banks, brokerage firms, and financial advisors. They play a critical role in helping investors access and understand structured products, providing product information, and facilitating transactions.

Q: What are the main benefits of investing in structured products?

The main benefits of investing in structured products include tailored risk-return profiles, access to a wide range of underlying assets and strategies, potential for diversification, and the ability to achieve specific investment objectives, such as capital protection, yield enhancement, or market-neutral returns.

Q: How do structured products handle dividends from the underlying assets?

The treatment of dividends from the underlying assets in a structured product depends on the product's structure. Some products may pass through dividend income directly to the investor, while others may reinvest the dividends or incorporate them into the product's overall return calculation. It's important to review the product documentation to understand the dividend treatment.

Q: Can I customize a structured product to suit my specific investment objectives?

Yes, some issuers offer tailor-made structured products that can be customized to meet an investor's specific risk-return preferences and investment objectives. Customization may include selecting specific underlying assets, adjusting the product's payoff profile, or incorporating additional features like barriers or caps.

Q: What are some common structured product strategies for market-neutral investors?

Market-neutral strategies aim to generate returns irrespective of market direction. Common structured product strategies for market-neutral investors include relative value strategies, option-based strategies (such as straddles or strangles), and volatility trading strategies.

I’m uncertain about the advantages or what I should be seeking when considering an investment in Structured Products or Certificates. Could you clarify?

Nicolas Bron2023-05-11T20:33:08+02:00May 7th, 2023|

I’m uncertain about the advantages or what I should be seeking when considering an investment in Structured Products or Certificates. Could you clarify?

What is the impact of leverage on the risk-return profile of structured products?

What are the main types of underlying assets in structured products?

What are the main factors that influence the pricing of structured products?

How do structured products handle early redemptions?

What is the role of a distributor in the context of structured products?

What are the main benefits of investing in structured products?

How do structured products handle dividends from the underlying assets?

Can I customize a structured product to suit my specific investment objectives?

What are some common structured product strategies for market-neutral investors?

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