Structured Product


What is a Structured Product?

A Structured Product ["SP"] is a hybrid investment instrument, which is used to improve the return on a fixed income or an equity instrument while reducing the risk on the product using a derivative instrument as an insurance on the downside.The layer of derivatives gives it the flexibility needed to blend with a portfolio and enhance its risk to return performance while matching an investor’s objectives. High-risk, high-reward SPs can form a part of the ‘Equity Allocation’ while its lower risk designs can be plugged as part of the 'Debt Allocation'. This is probably the only instrument which requires minimal human intervention during the course of investment post the designing stage. Hence, it’s a passive strategy which is Mechanical in nature.


Our Structured Product philosophy at AnandRathi Wealth

At Anand Rathi we design Structured Products (SPs) to maximize the probability of achieving the Investment Objective. The tenure of these products is around 3.5 years with a minimum lock-in of 1 year. There are predominantly two kinds of structured products at AnandRathi Private Wealth Management (ARPWM) :

Debt Structured Product: The target return on the product is around 15% p.a. even in a flat market with a possibility of positive returns in negative markets

Equity Structured Product: The target return on the product is around 18-21% p.a. at 4-8% p.a. NIFTY performance.

 

Types of Structured Products at AnandRathi Wealth

Depending on the risk appetite of the investor, every product has a pre defined payoff scenario that yields max coupon if at final observation (~3years from Investment Date) the NIFTY Level is at or higher than the Threshold NIFTY Level.

The below mentioned product ideas are for a 1260 to 1330 days.

 

 Asset Allocation Debt Debt Equity Equity
Product Name Magnifier Protected Accelerator Accelerator Accelerator Plus
Max Coupon 62% 68% 80% 95%
IRR 15.00% 15.30% 17.50% 20.11%
Threshold  NIFTY Level >=8000 >=9396 >=9396 >=9396

Desired NIFTY Performance

(From Contingent Level)

0% 16% 16% 16%
Principal Protection till

-13%

-90% 0% 4%

Market Today

10252.10 59.15 (0.58 %)