Nick Johal: Four risks associated with structured products?

‘Too good to be true?’

clock • 4 min read

In the interests of transparency and balance, Nick Johal acknowledges some major risks associated with investing in structured products, which underline that these are not necessarily low-risk investments

So are structured products too good to be true? After all, the historical returns are compelling, with limited chance of capital loss and returns in the region of 6% to 8% a year for autocalls, while interest rates in the UK remain at, or close to, historical lows. Some recent media attention has focused on the compelling risk-adjusted returns and benefits of adding structured products to a portfolio of investments. With low interest rates and after a 10-year equity bull market, these investments are able to deliver equity-like returns with a high probability of achieving them. The secto...

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