Customised financial engineering
A structured product is a combination of a number of different financial instruments. The combination may consist entirely of traditional financial assets, such as equities, bonds or currencies, or it may comprise conventional financial assets and derivatives (such as options).
Structured products are issued on the financial markets and traded as securities. Their risks – including liquidity, foreign exchange, interest, volatility, and insolvency – depend on the types of assets included in the structure.
Guaranteed capital funds are a common structured product. They guarantee that the amount repaid at maturity will be at least the original investment (less charges). The return paid when the fund matures is linked to movements in the underlying assets, such as a market index or a basket of equities. The main protection is provided by incorporating derivatives, such as options, into the fund.
Some products (‘click funds’) lock in gains through ‘clicks’. This means that when the underlying index reaches predetermined levels, the resulting gain is added to the fund permanently, regardless of any future movement in the underlying asset (in other words, even if it falls in value). On the other hand, the investor continues to benefit from any further increases.
BNP Paribas Fortis offers a comprehensive range of structured products, continuously updated to reflect the latest developments on the financial markets. On request, we call in financial-engineering experts to share their proven know-how in structuring tailor-made financial solutions.