Ten Myths of Structured Products Myth 1 - They won't work in portfolio planning Structured products are often considered as stand-alone investments and compared as direct alternatives to for example cash, equities or corporate bond funds. This approach is based on limited understanding of how to construct investment portfolios that manage risk and create asset diversity. They work best when used in conjunction with other investments where the defined returns and capital protection can be used to balance, perhaps, higher risk unprotected equity strategies or in lower risk portfolios to offer better than cash returns without risking capital. In sophisticated portfolios structured products can also offer investors access to other assets or markets such as commodities or emerging economies with capital protection where investors can benefit in any uplift without directly buying into the market. This creates asset diversification into potentially volatile markets without necessarily increasing risk to capital. Myth 2 - They are too complex for retail investors Just as there are many kinds of mutual funds, there is great variety within structured products. Depending on their needs investors can select from the vanilla to the complex, similar for example to buying open ended tracker or hedge funds. What makes structured investments stand out from the crowd is their transparency over how their returns are calculated. Payouts are often described as a formula based upon well known world indices with a specific investment horizon. Such products allow potential investors to clearly understand how a product will perform, both from a positive performance and downside risk perspective. For a provider of a structured product to deliver transparent payouts that often differ from more traditional funds, products are hedged internally, a task that often needs derivatives. Considered in isolation derivatives are complex, but within a structured product they simplify investing because providers can define investment risk. It is perhaps the success of structured investments and their transparency, that there is a desire to understand these elements. Myth 3 - Investors cannot get out of them when they want to Structured investments are designed to payout on a given day in the future and as such are designed to be held until maturity. Terms often range between one and five years depending on the product. This fixed term nature is often misunderstood as meaning that there is no opportunity, no matter what an individual's circumstances are, to exit a structured product prior to this maturity date. This is often not the case. Within Europe there is a vibrant and active secondary market in structured products, and there are many possibilities where the ability to sell such products and potentially realise any gains made, can form an important part of a clients regular portfolio review. What investors must be aware of is that all fees are predetermined and taken upfront on a structured product and there are many market attributes that can affect the current price of a structured product such as interest rates, market volatility (as well as the index level be) and time to maturity. The impact is that even for products offering 100% capital protection, investors can get back less than they invested if they chose to exit a structured investment early. Myth 4 - Investors can't access them in the same way as funds It is true that financial advisers and investors have historically not been able to invest in structured products through fund platforms. Which is in part been due to the infrastructure challenges of adding fixed term structured products to such platforms. However, the market is evolving. Platforms are listening to the demand from financial intermediaries and investors and some already offer structured products from selected providers. Myth 5 - They underperform unprotected equities Structured products can under and outperform unprotected equities depending on the structured product, the type of equity that is being compared and the prevailing economic environment when the comparison is made. The clear difference between unprotected equities and structured products is that the potential returns from a structured product are clearly defined and there is usually a degree of capital protection, which many investors find attractive when making the comparison. Myth 6 - Consumers cannot judge risk since providers don't disclose the counterparty or credit risk A number of providers in the past used the credit ratings of external agencies, such as Standard & Poor's, to describe the counterparty risk associated with a product. As the Lehman's event showed, a greater level of disclosure was felt necessary for retail investors. Today the leading providers of structured products take particular care to provide information such as naming of the underlying counterparty and education relating to counterparty risk. Myth 7 - Investors should avoid structures because they don't benefit from share dividends Structures often link the performance to the growth of an index, for example the FTSE 100. Normally the index chosen is known as a price return index which tracks the growth of underlying equities but does not include any dividends. The reasons for this are clear and transparent. Structured investments are designed to deliver specific returns based on expectations of market growth, often providing a level of security against market falls. Defining returns in this way means it is possible, in simplistic terms, to exchange one feature for another to create different returns. Dividends are a good example, as often their positive 'value' can be used to help offset negative market risks - exactly the type of trade off that structured investments specialise in. However, not all structured investments forgo dividends and there are many products linked to assets such as commodities or emerging markets where there are no dividends. Myth 8 - They are not always available The market for structured investments has grown considerably over recent years and continues to grow. 2009 has already seen more than 900 product launches with October alone seeing more than 100 product launches (structuredretailproducts.com), indicating there is a varied and regular stream of products available. Myth 9 - Investors can't monitor progress of them The structured investment market has developed rapidly and the ability for investors and advisers alike to monitor performance has been one of the many areas that have seen advances. Many providers are now offering product-monitoring tools on their websites and the introduction of structured products on platforms will mean more tools like this will become available. Structured investments are not an investment panacea, but they can and do provide excellent investments that millions of investors currently hold as part of a balanced and well allocated portfolio. That they will continue to do so is not a myth. Myth 10 - They are too expensive As with all investments, there are fees associated that reflect the launch costs and expected profits. Whether it be the product research, creation of literature, distribution costs or indeed the cost of advice, these fees can be defined at the outset of a product's design and thus allows such costs to be 'in-built' into any product returns. This is due to the fixed term nature of structured products which allows providers to offer returns net of any fees. This enables investors to consider whether the investment meets their needs without having to consider the impact of charges, which can be an advantage. These fees are not standard for every product, since products differ through payout, term, and how they are distributed. That said the costs, including advice, are typically between 1% to 1.5% per annum. This compares favourably with many, more traditional, investments. SPGO is a whole of market online structured product investment platform. We help you compare, monitor and use structured products more safely for free.
10 Easy Steps to Succeed in Your Online Classes
Congratulations Youve made up our minds to pursue your upper schooling, and doing so online is how to pass if you have an interest in a versatile, studentcentered educating manner. Studying online permits you to pursue different pursuits and attend to different responsibilities whilst nonetheless operating your method towards some extent. However, it will now and again imply that its clean to get distracted. Here are 10 clean steps to verify luck on your online categories.
- Connect together with your instructors once conceivable.
Even in case you are doing smartly within the category, its extraordinarily vital to increase a rapport together with your trainer. When you do that early on, you temporarily understand what the priorities are within the route, what expectancies the professor has of you and youre going to be motivated to prevail, surer of whats forward and higher ready to do smartly with the impending subject material.
Valuable questions to invite your trainer come with the next
How versatile are you with time limits
How versatile are you with grownup freshmen
What applied sciences do you employ within the route
How to be had are you through e mail and different sorts of verbal exchange
How do you put up an internet neighborhood and what are the expectancies for participation in it
In addition, since instructors are to be had to lend a hand all over the classes, its all the time just right to have had private touch with the trainer early on. This method, when you wish to have lend a hand, its more straightforward to achieve out and get the help you wish to have.
- Confirm the technical necessities of the route.
Online categories can also be very advisable for college kids with busy schedules, however provided that they are able to simply get right of entry to the fabrics. It is vital to obviously perceive what the technical necessities are. So, ahead of the route begins or as quickly thereafter as conceivable, youll want to test that your pc will paintings with the entire online equipment, and that you understand how to navigate them. This will be sure that you dont must spend time all the way through the route attempting to determine the generation.
three. Create a time table and stick with it.
Quality online instructors create classes which might be clean to navigate and feature transparent expectancies. Having that roughly easytodealwith framework in position will make learning and succeeding that a lot more straightforward. However, although the framework and necessities of your category arent as transparent, youll create a time table and construction, which is able to very much fortify your probabilities of luck within the route. Using equipment equivalent to Google Calendar is a good way to start out. Knowing how your weeks and months glance and scheduling blocks of analysis time for each and every activity or module will will let you stick with a time table.
four. Ask questionsall the time.
When you dont perceive, ask questions. When you do perceive, ask additional questions. Instructors recognize scholars who take part, and if theres a participation or dialogue part a part of the grade, then asking high quality questions is helping guarantee your grade on this space. Even if there isnt a participation part, its all the time helpful to invite inquiries to remember to perceive the fabric and are transparent on what is needed of you.
five. Be arrangedand keep arranged.
Students whore taking conventional, campusbased classes most often have a constant time table to observe each and every week, through which study room instruction is adopted through assignments out of doors the category. However, for online classes, scholars will have to search out their very own techniques to stick on most sensible in their paintings. It is crucial that you just be arranged from the start of the semester with the intention to achieve success in an internet route. For instance mark task due dates on your calendar, discover a submitting machine for each online subject material and bodily subject material that is helping you stay monitor of the whole lot simply, and shed light on find out about schedules that duvet sections of the route one by one so youve got an arranged tactic to protecting the semesters subject material as you pass alongside.
- Have a blank, quiet, and constant workspace.
One factor online and inclass classes have in not unusual is that scholars all the time want a spot to review or whole assignments this is blank, quiet, and constant. You can select the place that is for youwhether or not its at a espresso store, a college library, a devoted place of business, or at house. Wherever you select to review and whole assignments, you must make it a constant location that doesnt have out of doors distractions. It is basically key that where is quiet and lets you focal point in your paintings with out distractions.
- Do no longer procrastinate.
Successful distance freshmen hardly procrastinate. They dont do away with assignments or wait till the final second to write down their papers. Successful online scholars experience freedoms that come with operating at their very own tempo and the facility to finish their paintings in as a lot time because it takes them. On the opposite hand, they know that finishing their assignments is best performed early and on time cramming merely doesnt paintings, and it doesnt will let you retain knowledge longterm. Get began early on getting a success.
eight. Work in your studying comprehension.
Successful distance freshmen generally tend to have just right studying comprehension abilities. Most conventional, campusbased scholars concentrate to lectures and take notes, and a few online classes additionally require this. However, the vast majority of distance freshmen are anticipated to grasp subject material thru a large amount of studying. Although far finding out classes be offering video recordings and audio clips, maximum systems require scholars to hide and grasp a considerable amount of written knowledge. If it is a problem for you, it could be very useful to first sign up in a studying comprehension route there are lots of assets online that will help you do that. This ability by myself could make a huge distinction on your luck.
nine. Establish and admire routines that be just right for you.
If, for instance, youre employed best within the morning or in brief bursts, then set find out about routines that can help you find out about within the prelunch hours when your mind is contemporary. If, then again, you do best through learning at evening or at the weekends when youll devote nightowl hours or longer blocks in your learning, then make it some degree to take action. Consider how and whilst you paintings best, and enforce a find out about plan that respects the routines that be just right for you.
- Connect together with your friends.
Establishing sturdy connections with friends and professors is a very powerful facet of tutorial luck, in addition to skilled development. One of essentially the most rewarding reports in schooling is finding out thru collaboration. Forming significant relationships together with your friends and professors can can help you be told extra, keep motivated, and feature an outlet to specific your personal working out of subject material. So, keep attached thru message forums, chat rooms, e mail, and different digital assets. And take note lots of the other people you meet in faculty shall be conceivable process assets down the road so determine connections and keep in contact
Florida National University gives a wealth of tutorial and professional online classes. Check out the entire choicesyour long run is ready
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