AAM provides our customers with innovative portfolio and risk management solutions that go beyond traditional asset classes and strategies.
Knowledgeable Insight Across Multiple Product Lines
Structured products offer investors the potential to diversify their portfolios with investment vehicles that can be closely tailored to their individual return objectives, risk profiles, and market views. Originally developed primarily for institutions, a diverse lineup of structured products can now be used by investors to complement their portfolios.
With structured products, the core asset is generally a CD, bond or note, combined with an option on a second underlying asset, which can include equities, indexes, currencies, commodities, interest rates and yields as benchmarks, or a combination. Instead of a predetermined interest rate, potential return is linked to the performance of the underlying asset. It can be helpful to think of the core asset as the principal or protection component and the underlying asset as the growth component.
There are several types of structured products and they vary in complexity. Some offer full or partial principal protection in exchange for limited participation in any upside appreciation of the underlying growth component. Others offer limited or no principal protection, but greater participation in the performance of the growth component.
At AAM, we have a track record of working with advisors as they explore these varying solutions. We stand ready to assist advisors making their determination of whether or not structured products fit into their portfolio and, if so, how they might properly position them in those portfolios.
- Structured products are generally illiquid and not suitable for all investors.
- Structured product maturity periods may be lengthy.
- Any principal protection is contingent on holding the investment to maturity and subject to the issuer’s ability to pay back the principal when due.