FUELLED BY A SUSTAINED period of low interest rates and a demand for higher yields compared with traditional investments, wealthy investors are increasingly turning to structured products with the aim of achieving their financial goals.
Chuck Ng, head of sales for structured products and investment funds at Credit Suisse's Private Banking division, says the innovation of structured products offers benefits to investors in ways not possible before.
He says structured products offer the flexibility of applying a market view that is not possible through simple long and short positions in vanilla securities - securities that have nothing unusual.
A case in point is the advantage derived from assuming asymmetrical payoffs that are possible through structured derivatives. Structured derivatives can also be customised to fit various specific demands of the more sophisticated client. In other situations, convenience is offered. For example, participation in the commodities market is possible without having the hassle of watching futures positions for rollovers.
Mr Ng says the flexibility of structured products allows Credit Suisse bankers to demonstrate and act with versatility when providing advice and solutions to clients.
'Now we can apply look-back options to mitigate the cost of regret. We can also reduce exposure to systemic [market] risk and yet gain access to specific desired risks throughout performance structures. These are just a few examples of the various possibilities abundant in the structured derivatives world,' Mr Ng says.
