Structured notes: Looking beyond the 60/40 portfolio
Your clients’ financial goals may not be wedded to one or two investment options over another.
That’s why—given the challenges of today’s markets—it can be useful to look beyond traditional stocks and bonds. And many advisors are considering structured notes as a potential option.
What are structured notes?
A structured note—also known as a structured product, investment, or solution—generally is an unsecured obligation of an issuing financial institution that often combines a zero-coupon bond with a derivative package linked to an underlier such as an index, like the S&P 500; or commodity futures, like oil or gold; or specific assets, like a blue-chip or technology stock.
In some cases, structured notes can be customized—so that financial advisors can aim to meet different allocation targets, levels of exposure, and a defined risk and return profile.
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Structured notes are not necessarily an asset class, rather they can be used:
- as an allocation tool;
- tailored to express a particular view on the markets;
- and/or to supplement existing portfolios with the potential for yield, growth, or protection.
Marc Premselaar
Senior Managing Director, Head of Capital Markets, CAIS
The roles a structured note may potentially play as a part of an overall strategy to seek to:
Enhance growth
Hedge against risk
Supplement income
It’s important to stress that structured notes are complex financial instruments. Structured notes are prospectus-driven investments, and so CAIS strongly encourages financial advisors to carefully review the subject issuer’s written prospectus when considering all components and risks associated with structured products prior to making an investment decision.
Your business and the CAIS Structured Products Platform
The CAIS Structured Products Platform provides financial advisors with the ability to access to a menu of structured notes issued by some of the world’s largest top-tier investment banks.
CAIS product specialists are available to facilitate conversations with issuer partners, who may be able to customize solutions and offer competitive pricing.
Learn more
The CAIS structured products team is available to facilitate conversations with issuers to identify available custom opportunities that may be appropriate.
Additional resources
Hear from the CAIS team on structured notes
Dive deeper into structured notes
CAIS IQ, our proprietary education platform
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