Structured products: not so safe after all

Structured products were meant to offer the best of both worlds. But a serious threat to your capital is now becoming clear to some investors. Jody Clarke investigates.

Structured products were meant to offer investors the best of both worlds. Designed to provide returns when markets go up, but also to protect your capital when they fall, they're not a hard product to sell, particularly at times like these. After all, even if markets crash, you'll at least get your money back, right? Sadly not, as it turns out.

Most structured products have an investment term of, say, five years. The idea is that at the end of the term you get your initial investment back, plus a proportion or a multiple of any rise in a chosen index. In some cases, your capital may be at risk if the index falls particularly sharply. But a more serious threat to your capital is only now becoming clear to some investors.

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Jody Clarke

Jody studied at the University of Limerick and was a senior writer for MoneyWeek. Jody is experienced in interviewing, for example digging into the lives of an ex-M15 agent and quirky business owners who have made millions. Jody’s other areas of expertise include advice on funds, stocks and house prices.