What is one benefit of using structured products?

Using structured products can provide a reduced risk and enhanced returns feature, making them an attractive option for investors looking to optimize their investment strategies. Structured products are designed to offer customized payoffs based on the performance of underlying assets, which can include stocks, bonds, or indices. This customization allows for a degree of risk management through features such as capital protection or contingent payouts, which can help mitigate losses compared to direct investments in volatile assets.

Additionally, the potential for enhanced returns comes from the embedded options or derivatives that can amplify gains under certain market conditions. By tailoring investments to specific risk appetites and market forecasts, structured products can effectively balance risk and reward, presenting an opportunity for greater returns in favorable scenarios while providing some downside protection.

While guaranteed returns, immediate liquidity, and high correlation with traditional asset classes are attributes or characteristics relevant to other investment options, they do not generally apply to structured products in the same way. This highlights why the selection of reduced risk and enhanced returns is a key benefit of utilizing structured products in investment portfolios.