FX Structured Products
Solutions designed to address specific
risk-return objectives
FX Structured Products
Solutions designed to address specific
risk-return objectives
Implement winning strategies through highly customisable structured financial solutions with performance linked to underlying FX pairs. These can be used for yield search, managing exposure with other currencies, and hedging purposes. These may include market indices, individual or baskets of stocks, bonds, and commodities, currencies, interest rates or a mix of these.
Extensive Catalogue Of Products
- Structured Deposits
- Structured Notes
- OTC Structured Products such as Accumulators, Target Redemption Forward, Pivot Target Redemption
Diverse And Customisable
Issuers can tailor structured products to meet investors’ unique financial needs and circumstances.
Potential Yield Enhancement
If the view of the market proves correct, these can be a useful alternative to savings accounts, current accounts or term deposits.
There are two categories of structured products: structured deposits and structured notes.
| Structured Deposits | Structured Notes | |
|---|---|---|
| Return | Returns may be fixed or variable, depending on the structure or performance of underlying asset. | Apart from fixed and/or variable returns, there may also be capital appreciation depending on the performance of the underlying asset at maturity. |
| Principal | Investors will receive their full principal (subject to the issuer’s credit risk) when they hold the structured deposit to maturity or during early redemption by the issuer (if applicable). | Investors may potentially lose part or their entire principal when the underlying asset performs against them. |
Structured Deposits
They typically have a zero-coupon bond and an option component. A zero-coupon bond pays no coupon but is purchased at a discount (for example, 80% of its maturity value). The remaining value (20% in this case) is used to purchase an option for the underlying asset of the structured deposit. Instead of providing a regular coupon, a zero-coupon bond may, for example, be purchased at 80% of its maturity value. At maturity, it will pay the full value of the money invested.
Structured Notes
Unlike structured deposits, structured notes offer no principal guarantees (unless a third-party guarantees the payout of principal in the event the structured note issuer defaults). They typically involve options: the structured note issuer either buys or sells an option on the reference asset or security, and the investor gives the issuer the right to put securities on or call securities from him/her.
| Loss Of Capital As a structured product’s performance depends on performance of the underlying asset or index, adverse price movements may cause a loss of capital. | |
| Lack Of Liquidity Generally, investors will have no access to their principal for the tenor (or term) of the structured deposit or note, without incurring some risk of loss on the principal. | |
| Issuer Risk If the structured deposit or structured product issuer goes into debt default, the investor risks losing his/her entire principal. |
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