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Structured products are financial instruments that combine features of traditional investments (e.g. equities, bonds) with customized payoff structures. The payoff depends on the performance of the chosen underlying assets such as equities, bonds, commodities. They are typically designed to provide a specific investment outcome, such as a fixed return or capital protection.
One of the main advantages of these products is that they can provide customized investment outcomes that align with an investor’s risk tolerance and investment goals. Additionally, they can provide diversification benefits by combining different underlying assets, which can help reduce portfolio risk.
Another advantage of these products is that they can provide protection against market volatility. Furthermore, some structured products can provide access to alternative investments such as commodities or currencies, which can be difficult for individual investors to access directly.
Structured products are an effective tool with which one can be invested in the market and benefit from a higher yield while selecting the desired level of risk. KIMFO attributes significant importance to choosing the underlying assets of each and every product they create, and at the same time selects the appropriate characteristics that also allow for the most attractive returns.
The process of creating structured products involves several steps. The first step is to identify the investment opportunity. This depends on the preferred type of product i.e., a fixed income product, a product related to the equity market, etc.
The next step is choosing the underlying assets – KIMFO’s analysts base their selection on examining the appropriate financial data. Every product is reviewed and approved by KIMFO’s experts before presented to the client for approval.
Once the product is approved, KIMFO will request to receive quotes from various banks and financial institutions in order to make sure the product has the highest interest possible. After selecting the most attractive issuer a Term Sheet is produced and an ISIN is received. This enables the client to give instructions to its bank to purchase the product that is then placed in the client’s account as any other traded security.
Once the product is approved, KIMFO will request to receive quotes from various banks and financial institutions in order to make sure the product has the highest interest possible. After selecting the most attractive issuer a Term Sheet is produced and an ISIN is received. This enables the client to give instructions to its bank to purchase the product that is then placed in the client’s account as any other traded security.