Investing in Structured Products
A structured product, known by names such as equity-linked note, market-linked note, or principal protection note, is a prepackaged investment based on derivatives. They can present themselves in several forms including a single security, multiple securities, commodities, options, options on hedge funds, and more.
What are Structured Products?
According to the SEC, structured products are “securities whose cash flow characteristics depend upon one or more indices or that have embedded forwards or options or securities” where “payment obligations are contingent upon changes in the value of underlying assets, indices, interest rates or cash flows.”
What Do Structured Products Have to Offer?
Structured products offer an alternative to traditional investment products like stocks, bonds, and mutual funds. They typically are part of the asset allocation process to diversify a portfolio in an attempt to minimize risk. Some structured products offer a “principal guarantee,” which may provide some level of protection to the principal if held until maturity.
Call a Los Angeles Structured Products Lawyer Today
Similar to any investment, there are certain attendant risks. If you suffered significant investment losses after investing in structured products or if your stockbroker or brokerage firm failed to inform you or misrepresented these risks, you may have certain legal rights that require your immediate attention. Contact an experienced Los Angeles structured products lawyer today for a consultation to discuss your rights and obligations.