Structured Products & Certificates with Tower of London Worldwide

What are Structured Products?

In finance, a structured product, also known as a market linked investment, is generally a pre-packaged investment strategy based on derivatives, such as a single security, a basket of securities, options, indices, commodities, debt issuance and/or foreign currencies, and to a lesser extent, swaps. The variety of products just described is demonstrative of the fact that there is no single, uniform definition of a structured product. A feature of some structured products is a "principal guarantee" function, which offers protection of principal if held to maturity. Effectively a structured product is a tailored investment strategy that is intended to allow investors to gain exposure to equity indices, a basket of stocks, currencies, commodities or rates with a managed level of risk.

Structured investments are usually determined by two elements which are the level of capital protection required by the investor anda derivative which ultimately links the investment with an underlying index, basket of securities or currency. Consequently, structured products can add immense value to a diversified portfolio, subject to fitting the investors overall strategy.

Providers of Structured products to Tower of London Worldwide

Royal Bank Of Scotland, Commerzbank, Natixis, Goldman Sachs, Royal Bank Of Canada, JP Morgan, BNP Paribas, Morgan Stanley, UBS, Credit Suisse and EFG Switzerland.

Diversifying risk

Structured Products address the issue of ensuring clients that they are not exposed to concentrated counterparty risk. We hold probably the widest range of structured products globally, so as not to rely solely on auto callable options. Structured investments are a secure investment method based on a range of products also meaning that providers can lower the amount they have in collateral gilts, so they have more opportunity to generate higher returns. Having a portfolio of structured products will give you the investing power to be completely diversified with minimal risk by spreading your investment portfolio across different counterparty’s, underlying’s.

Questions & Answers regarding structured notes:

Q. If a structured product could go down in price because it is linked to an underlying index, or because of its bond content/volatility shifts, where should structured products be placed in client valuations?

A. Some argue that structured products should fall under a separate section in a client valuation, but when it comes to using them in a portfolio, they can be used instead of fixed income or equities.

Q. How do firms classify structured products? If a client holds a structured note instead of US equities, is it listed under US equities?

A. Structured Products are a way to access other asset classes, hence the term derivative. Therefore it is difficult to classify however, they are usually placed into valuations based on underlying exposure.

One must also be aware of the credit risk underlying the products, as exposure to one institution can add up across a range of structured products with potential cross-over with fixed income, for example.

An example of a structured Investment Product

Please click here.

Structured investments with Tower of London Worldwide

Tower of London Worldwides wealth management team have access to numerous structured products, which are often globally exclusive to us. We are also able to offer bespoke structured notes tailored by numerous financial institutions, that can be specific to a clients own individual and unique requirements.

For more information on current structured investment opportunities please contact one of our wealth managers.

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