Sunday, September 1, 2013

Structured Note Investment Strategies - August, 2013

Structured Notes are designed to capture customized returns around global financial markets. They come in variety of Flavors,
      Capital Guaranteed 
      Yield Enhancement
      Performance
      Leverage
There is lot of debate around the utility of these products as an investment. Some have gone to say that investors can create these products by using variety of option strategies. I would say, where there is return there is risk with varying levels. Some are high risk and high return products (Futures and Options) and others are low risk an low return ( US Treasuries) products. Every Investor has different levels of risk tolerance and expectations. Structured products caters to these needs of the investor.

Investors who are risk averse but not satisfied with their low yielding bond portion of portfolio can benefit from Capital guaranteed structured products. Some of these products pay the performance of the US yield curve, US CPI (inflation) and joint performance of Yield curve and Equity markets. Institutional investors and Insurance funds and other sophisticated Investors utilize these products as an overlay to their existing strategies to generate higher returns. These players have access to sophisticated tools to analyze the mechanics of the risk and return of these products. Now this (analysis) financial engineering and structuring can be accessed more easily at Gatick Financial Services

 Investors who are adventurous and want to risk a portion of their initial investment to attain better returns can look into Yield enhancement strategies. Now this class of products come in a variety of names and types. Some are called Auto callables, Trigger performers, High low callable Yield notes, digital plus, Capped Knock out, Reverse Convertibles and so on. All of these notes despite different names and have Risk and Return as common theme among them. Investors can tap into some of these products to improve returns on their portfolios. There has been huge brouhaha with respect to usability of reverse convertibles related Apple company very recently. I think, investors should be very cautious in terms of what kind of index or stock they are going to use in their structured product. They should also need to understand if they buy these products and trade out of them before maturity. Big players carry out this strategy all the time with the help of sophisticated financial engineering to price these products and identify opportunities to buy and sell these products.Now this (analysis) financial engineering and structuring can be accessed more easily at Gatick Financial Services.

Similary, for high risk investors Performance and Leveraged products are available to monetize their views. For further analysis, design and structuring of these products contact Gatick Financial Services.

 Details of Charts for August 12-30 Structured note issuance is provided below.









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