Most investment portfolios are comprised of real property, stocks, bonds, and mutual funds – but there is an additional group of investments that may be suitable for certain investors. Most commonly known as Structured Products, these alternative investments have recently experienced a surge in popularity among U.S. investors. Because of their ability to address a wide variety of investor objectives, Structured Products can help investors diversify their portfolio, manage risk, and take advantage of specific market views.
Structured Products combine many of the features of traditional investments such as bonds with financial derivatives such as options. This combination allows for returns linked to the performance of underlying investments, such as individual securities, market indexes, currencies, and commodities. Structured Products provide a range of additional features, including:
- Different levels of principal protection
- Enhanced yield
- Higher-than-market coupons
It is important to note, however, that Structured Products are complex and best intended for sophisticated investors, and may have costs of ownership, such as brokerage fees. Structured Products carry certain unique risks which should be carefully considered and fully understood by financial professionals and individual investors before investing.
Reverse Convertible Securities and Structured Notes are offered via prospectus, offering circular or disclosure statement. You can obtain these documents through your investment representative or dealer, or through the EDGAR section of the Securities and Exchange Commission (SEC) website at www.sec.gov. Carefully review these documents prior to making an investment decision. For additional information or to place an order, please contact your financial advisor or your firm’s trading desk. Structured Products are not suitable for all investors. Risks may include loss of principal or the possibility that at expiration the investor will own the reference asset at a depressed price. Structured Products often limit or cap upside participation in the reference asset, particularly if some principal protection is offered or if the security pays an above-market rate of interest. They contain a derivative component whose profit and loss potential emulates an option contract, particularly those where principal invested is at risk from market movements in the reference security. Even though Structured Products pay interest like debt securities, the potential loss of the principal for many such products may make them unsuitable for investors seeking alternatives to conventional debt securities. Certain securities discussed in this material are registered with the Securities Exchange Commission (the “SEC”) and the issuer of those products has filed a registration statement (including a prospectus, a prospectus supplement and a preliminary pricing supplement) with the SEC. All relevant offering documents including term sheets and prospectuses should be consulted prior to investing in these securities. Certain securities discussed in this material are not registered with the SEC but are issued pursuant to an exemption from registration. Before Investors make any investment, they should read the prospectus supplement and preliminary pricing supplement for registered securities filed with the SEC or the relevant offering documents for non-registered securities for more complete information about such issuer and the securities being offered. Investors should understand characteristics, risks, and rewards of each Reverse Convertible as well as those of the reference asset before making a decision to invest in the security. Investors should contact their own accounting, tax or legal advisors to review the suitability of any investment. Structured Notes are investment vehicles issued as either registered securities, non-registered securities, or as certificates of deposit. Registered securities are filed with the SEC as medium term notes. Non-registered securities are exempt from SEC registration and are typically issued by foreign-based banks via their U.S. branch offices using a 3A2 exemption. Certificates of deposit are insured by the Federal Deposit Insurance Corporation, please visit www.fdic.gov for current deposit insurance limits. Certificates of Deposit are not considered securities.