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Informacje i statystyki |
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 Structured products |
On August 25, 2006, the Warsaw Stock Exchange introduced new instruments - structured products - with structured bonds of Deutsche Bank in London being the first product in offer.
Structured products are financial instruments, the value of which strictly depends on performance of a given underlying asset (e.g. value of particular shares or a basket of shares, market index, currency exchange rate). They are issued by large financial institutions, most commonly by international investment banks or brokerage houses. The Issuer of such products is committed to pay out the acquirer the amount of money, calculated in accordance to a predefined formula, on a predefined expiry date. The formula defining payout rules facilitates the owners of such instruments to track the current value of it.
Basically, there are two types of structured products:
with capital protection guarantee - very safe, providing investor with a possibility to combine security typical for bonds with an opportunity to profit from an built-in market indicator - 100% capital protection is guaranteed (the investor doesn't lose invested capital),
without capital protection guarantee - more risky, with greater exposure to gains and losses caused by the built-in market indicator (no cap and floor levels, which gives an opportunity to record much greater profit or loss).
It is possible to divide structured products basing on their maturity. Short/medium/long term instruments can be identified.
Various types of structured products construction can be distinguished. This may be e.g. a zero coupon bond with an option added, certificate, stock warrant.
Seven reasons for investing in structured products:
- possibility of capital protection and profit participation at the same time,
- possibility of profits exceeding traditional investment forms like deposits or bonds,
- predefined payout formula - known for investor before the investment,
- access to new capital markets (e.g. abroad) and new instruments (commodities, currencies) to which access was previously impossible especially for many individual investors,
- direct access to services previously unavailable for individual investors,
- in case of structured products listed on a stock exchange possibility of selling an instrument on the secondary market (investor is able to give up on the investment before the instrument maturity),
- investment diversification.
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