Structured products are true all-rounders. On the one hand, they pave the way to asset classes that would otherwise be inaccessible or very difficult to access for private investors. On the other hand, the investment form also enables earnings opportunities in all conceivable price directions. Whether prices are rising, falling or trending sideways, there is a suitable product for every assumption. Structured products therefore allow the "Siamese twins" of investment, opportunity and risk, to be individually matched.
With our new knowledge newsletter "Leonteq Know-how", we would like to open the door to the world of structured products for you. We outline in a comprehensible way how the different product types work and highlight their advantages. But the risks are not concealed either.
Since the times in which the capital markets know only one direction are rather the exception, it always comes down to the best suitable solution. With structured products, investors are always in the best position, because flexibility is a central feature of these securities. The Swiss Structured Products Association (SSPA) classifies structured products into two main categories: Investment Products and Leverage Products. The investment products are in turn subdivided into the three categories "capital protection", "yield enhancement" and "participation". In the first issues of the new knowledge newsletter, we focus on yield enhancement. Among the instruments in this class, SSPA includes discount certificates and the various forms of reverse convertibles.
The breadth of their possible applications makes yield enhancement products an almost indispensable component of asset management. However, anyone wishing to act here should first familiarize themselves with important features and terms (see glossary). We will continuously expand the product-related glossary in the coming issues.
Basically, yield enhancement products have a predefined maximum return. In addition, partial protection also plays an essential role. The structure shows its full superiority when the underlying asset moves only marginally during the term. Then a higher return can be achieved than with a direct investment. While in the case of the discount certificate the discount granted on the price of the underlying asset can provide the profit, in the case of the reverse convertibles it is the coupon, which is usually guaranteed in advance. In the next issue of "Leonteq Know-how", we will present you in detail with the different types of reverse convertibles up to the multi-barrier reverse convertible and also test them for their practicality.
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11, email info@leonteq.com or contact us here.