The term “Structured Notes” is often thrown around in financial circles, or you may have heard it while speaking with your financial advisor. What is it actually?
Without getting into the technical details, the typical structured note sold in Asia is a financial asset (like a bond or stock) whereby the risk & return behaviour may mimic a bond when the product is performing well and conversely, it behaves like a stock when the product is performing poorly. Structured notes are commonly sold in banks in Asia, especially to service affluent and high net worth investors. In the retail or consumer banking space, it’s usually termed as “Structured Deposits.”
A structured note can be customisable in many different ways depending on the investor’s preference and risk profile. Think of it