Structured finance also is known as structured bonds or structured products that are intended to allow investors to gain exposure to equity indices, single stocks, a basket of stocks, currencies, interest rates, commodities and funds, while managing their level of capital risk. Structured products are highly specialised investments and come in two forms, Structured Notes and Structured Deposits.
You can use them to reduce risk when you invest in conventional assets like equities, funds or currencies or to diversify your portfolio by investing in commodities and indices that are otherwise hard to access. Most (but not all) structured products will repay an agreed proportion, or all, of the capital invested at the maturity date, although this capital protection may depend on certain conditions– for instance, an Index not having fallen by more than 50% during the term. If it has, then you may get less back.