Structured Funds

By: EconomyWatch   Date: 23 November 2010

About The Author

EconomyWatch

The core Content Team our economy, industry, investing and personal finance reference articles.

EconomyWatch, Content Team

 

  • Dot Div
  •      




A Structured fund is a kind of Bond that has a combination of Fixed Income products and equity products to let the investors have the combination of both capital appreciation and capital protection together. All these funds generally use free income securities to provide the Structured Fund Capital protection by means of principal repayment alongside the interest payment added gain. The Secured Fund also takes the help of futures, options and various other derivatives that are also based upon indexes in the market that are there to allow vulnerability to capital appreciation.

The investors who look to have downside protection normally go for these kind of Structured Funds and also for those who generally look for certain amount of monetary gain from the market through the upside movements. The Guarantees and the exact products normally alter from time to time depending on the type of Secured Fund.

One also gets the chance to change the Secured Fund options with the changing way of life. Though this is a false notion for those who deal with fixed annuity program. For this one does not have the chance to change the payment type at any stage of one's life after the fund is on.

If we take an example of the S&P Structured Funds which saves nearly 80 percent of the principal of the Structured Fund. This would mean that the it would invest as many as 80 percent of the total Structured Funds and thus has very little chance of going below the total of the principal amount. The investor would gain money if the S&P 500 gains and loses money as the S&P 500 falls. But the Structured Fund would never go under the starting value of the Structured Fund.

Structured Funds are not considered convincing for each and everybody. One needs to check elaborately before making any kind of investments in it.




  • Dot Div
  •      

Most Popular in Mutual Funds

Related Links
blog comments powered by Disqus