Don’t lose out. Invest in structured products with protection

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Personal Finance | Investing via a structured product is one way to protect your capital, but still have exposure to the stock market.

Sitting on cash is an option, but what if markets recover and investors lose out on potentially higher returns?

The structured product provider purchases a bond. If the bond is paying a 9% a year interest rate, the product provider would use R700 to purchase the bond as the total return from the bond at the end of four years would be R700 capital and R300 interest, providing you with the R1 000 originally invested.

Traditionally, it has been a reserve of wealthy individuals who had millions to invest. And, to be honest, those that were originally developed for the retail market lacked transparency and hid some seriously high fees. Japie Lubbe of Investec’s financial products team agrees. “The last six years have seen a surge in the number being issued and clarity on pricing is one of the main factors for their increased popularity.

 

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