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...

To continue reading this article...

Join Professional Adviser for free

  • Unlimited access to real-time news, industry insights and market intelligence
  • Stay ahead of the curve with spotlights on emerging trends and technologies
  • Receive breaking news stories straight to your inbox in the daily newsletters
  • Make smart business decisions with the latest developments in regulation, investing retirement and protection
  • Members-only access to the editor’s weekly Friday commentary
  • Be the first to hear about our events and awards programmes



Already a Professional Adviser member?


More on Structured Products

Exploring the options for downside protection in a bear market

Exploring the options for downside protection in a bear market

Making the case for diversification through structured products

David Wood
clock 04 January 2023 • 5 min read

Structured product returns fall in 2020 despite continued success

Almost three-quarters generated positive returns

David Brenchley
clock 26 January 2021 • 2 min read

Structured product performance analysis tool launched for advisers

Free for advisers

clock 02 March 2020 • 2 min read