WHAT IS A STRUCTURED PRODUCT?

Structured products are unlisted financial products, which are set up by financial organisations, in particular banks. These are relatively complex products, whose returns are often correlated to a stock market index. These products work with conditions and a calculation formula is defined from the start. For example, a structured product can be based on the Eurostoxx 50 (stock market index comprising the 50 companies with the largest market capitalizations in the Euro Zone); the formula could be, "as soon as the Eurostoxx 50 progresses positively", the investor recovers his bet, and earns a 15% return.

What is interesting with these products is that they are extremely flexible, and most of them have a protective barrier limiting capital loss.

HOW TO SUBSCRIBE TO A STRUCTURED PRODUCT?

Structured products can be held through a PEA, life insurance, a PER (Retirement Savings Plan), directly, or again through a securities account. In order to subscribe to a structured product, it will be necessary to check their availability according to your contract, and the insurer behind this contract. Indeed, some organizations hold exclusivity on certain structured products. Moreover, even some wealth management firms develop what are called dedicated structured products. More specifically, the firm chooses the underlying, indices, guarantees, etc.

It may be advantageous to go through an independent firm, in order to have a more global vision of the existing products on the market. Indeed, their offer is not only confined to a banking organization or an insurer.

WHY SUBSCRIBE TO A STRUCTURED PRODUCT ?

The year 2022 is a pivotal period for the financial and real estate markets. Indeed, the vast majority of asset classes have suffered significant declines since the start of the year. These declines obviously bring their share of opportunities. However, the strategy we recommend at the end of the year is to invest with caution. And some structured products specifically follow this guideline. Indeed, some products offer attractive returns, while providing the investor with capital guarantees.
Many investors are still positioned on Euro funds, whose returns have been at half mast for several years. Some structured products therefore represent an excellent alternative to these unsuccessful investments, while providing the same capital guarantee, but higher returns.

IT IS VERY RISKY TO INVEST IN THIS ASSET CLASS ?

There is a very wide variety of structured products. Some of them are indeed very risky, but some have attractive capital guarantees. Over the period that was defined at the start, generally varying between 2 and 10 years, the capital can be guaranteed up to 100%. To conclude, to make sure that a structured product is suitable for your financial situation and your risk appetite, you will have to look at two essential elements: the underlying and the capital guarantee mechanism.

For any additional information, do not hesitate to contact one of our wealth advisors on +33 1 45 03 80 96.