Structured Products
ABN-AMRO, Tillerman & You — always in good company
Only five institutions have earned the privilege of being Authorized Distributors for ABN-AMRO Structured Products in the Caribbean Offshore Sector — UBS, Credit Suisse, BSI, Pictet Bank, & Tillerman Securities
Structured Products, in their simplest form, are hybrid securities containing debt components coupled with embedded derivatives. This combination of financial assets allows structured products to be highly customized according to investor demands both across asset classes as well as risk profiles.
At ABN AMRO, they traditionally categorize structured products by risk, which allows Tillerman’s Relationship Managers and Investment Advisors to position these highly complex products properly within a client’s portfolio.
From an asset class perspective, structured products can be linked to equities, commodities, foreign exchange, rates, credits as well as indices and traditional and alternative investment funds.
From a risk/reward perspective, the categorization of structured products is as follows:
1) Capital Protection
Capital Protection products protect a portion (up to 100%) of the invested capital. In addition to this capital protection some products might offer minimum guarantees on the performance of the investment. Capital protected products offer a defensive investment and might be an ideal way to invest in financial markets with little or no capital risk.
2) Yield Enhancement
Yield Enhancement products enable investors to obtain attractive, above average yields in markets that are flat or moderately rising. Currently there are five main offerings, which are based on a similar economic concept but offer different payouts.
3) Performance Tracking
Performance Tracking products trace the performance of the underlying asset on a 1:1 basis. Purchasing these products is similar to making a direct investment in the underlying asset itself. Generally, the risk-level is between moderate to high.
4) Leverage
Leverage products provide leveraged exposure to the underlying asset (with less money / small capital investors can gain more exposure to the market). There are two types of Leveraged products: Bullish / Long ones intended for investors expecting major upward market movements and Bearish / Short ones intended for investors expecting downward market movements. The risk-level of these products are very high due to leverage.
To find out how to properly utilize structured products in your investment portfolio please contact your Tillerman Securities representative.
