Structured Products

Participation products closely track an underlying asset. They carry the same downside risk as the underlying. These securities are a good choice if you expect the underlying to go up. Bonus certificates also have a bonus level that may take effect depending on the underlying’s performance.

Yield enhancement products pay a defined coupon and contain a risk buffer or “barrier.” If the underlying falls below the barrier, you lose the protection and carry the same risk as if you held the underlying asset. This solution is a good choice if you expect the underlying’s price not to change.

With capital protection products, you participate in any price gains of the underlying asset, while the recovery of your initial investment is also guaranteed by the issuer if the underlying asset falls in price.

Structured products are not fund assets and so are not protected if the issuer files for bankruptcy. That makes the issuer’s creditworthiness very important. This risk falls to the investor.

Investments can only be sold if there is a buyer willing to take them. If no buyer can be found, it may not be possible to sell the investment at a reasonable price. This risk falls to the investor.

Market prices generally fluctuate. Market risk refers to the danger that the price of the underlying asset may not develop as expected. This risk falls to the investor.

Exchange rate fluctuations can affect the value of an investment if it is denominated in a foreign currency. Investors may end up sustaining a loss even if the product goes up in price.