A pre-packaged basket of instruments that typically include derivatives and a security linked to interest, and that is tied to an index or a basket of other securities. Investors typically choose to invest in structured products for their customizable features. It is often built by taking a traditional security, like an investment-grade bond, and replacing the usual periodic coupons and final principal payment with non-traditional payoffs derived from the performance of other(s) underlying asset(s).
Structured products are all different and are quite complex at first to understand. They provide investors with easy derivative strategies that can hedge portfolios. They are one of the few investment products that can be principal-guaranteed.
Structured products are quite popular in Geneva where many investment banks act as issuers and directly engage with private clients, or institutional clients, about their needs.
More information about a specific structured product can be found in its term sheet. The term sheet provides the terms and conditions of the product. It is a non-binding document.