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Investor Solutions

Our Treasury and Investment division offers a range of structured investment products for clients seeking to invest their money and/or looking for an enhanced yield without risking their capital.

What Are Structured Products?

Structured products are pre-packaged instruments that are linked to securities, commodities, options, indices, fixed-income and swaps which can help you achieve high returns and effective portfolio diversification. They can be tailored to suit different risk appetites and different market conditions.

Through these flexible products, our clients can have an exposure to the different traditional and non-traditional asset classes with capital protection at maturity, which reduces the degree of market risk involved, and which can be tailored in different ways to suit the client’s needs and risk appetite.

In terms of return, structured products generally fall under two categories:

  • Coupon-based structures: where coupon is defined and based on a pre-defined condition
  • Participation structures: where coupon is linked to the performance of the underlying asset. Participations can be unlimited or usually have an upside/downside limit (i.e. capped/floored)

Structured products have many features, and like any investment or long-term deposit, it is important for you to understand the product you are investing in, its risks, as well as the role it could play in achieving your overall objectives. Therefore, we advise you to get in touch with our experienced treasury sales or Relationship Managers, who will assess your risk appetite and investment objectives in order to structure the right type of products that would suit your needs.

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  • When are structured products appropriate for you?

    • Looking for tailor-made solutions to meet specific investment objectives.
    • Looking to earn a return higher than a conventional deposit.
    • Seeking to protect capital on your investment.
    • Diversifying your portfolio to enhance your return and/or reduce your total risk.
    • Achieving a return linked to a certain market view.
    • Looking to earn a return that reduces borrowing costs or decreases FX exposure.
  • Features and benefits of structured products

    • Investments that provide you with the potential opportunity to earn a higher return than those offered by conventional fixed deposits. These products have returns that can be linked to the performance of an underlying benchmark such as interest rates, equity markets, commodities, corporate credits or foreign exchange markets.
    • An attractive addition to your portfolio as they give you the flexibility to tailor an investment structure to meet your specific financial objectives—taking into consideration factors such as your goals, risk tolerance and time horizon.
    • Offer full or partial capital protection.
    • Offers leverage to your capital by investing in options and swaps.
  • Product examples

    Commodity linked structures

    Pays a return linked to the performance/movement of a single commodity (e.g. oil, gold, copper, etc.) or a basket of commodities over a defined period. The investor can get a fixed coupon, or participation in the performance of the underlying commodity.

    Examples:

    • Note linked to oil performance
    • Best of commodities

    Equity linked structures

    Pays a return linked to the world/regional/local equity market(s) over a defined period.

    Examples:

    • Puts and calls on GCC and International equities
    • S&P Linked Deposits

    Interest rate linked structures

    Interest rate linked structures offer an enhanced return by taking a view on one of the IR underlying rates such as EBOR, LIBOR, Swap rates, etc. They also offer the ability to hedge future payables or receivables based on interest rates.

    Examples:

    • Range accruals
    • Step up deposits
    • Interest rate swaps hedging ideas.

    FX linked structures

    Pays a return linked to a global foreign exchange (FX) market. Usually a short-term investment that pays out an enhanced return determined by the movement in foreign exchange rates over the life of the product.

    Examples:

    • Dual currency deposit
    • Two year BRIC deposit

    Credit linked structures

    Usually offer a higher return compared to a vanilla bond or conventional deposit. The investor takes a view that a default will not occur on the underlying reference entity. These structures also allow the investor to transfer credit risk.

    Examples:

    • Credit: two year credit linked deposit
    • Credit: three year FTD basket

    Hybrid products

    These structures are based on combining different asset classes i.e. combining interest rates, currencies, gold prices, commodities etc. along with equities. Hybrid structures replicate the returns of a diversified portfolio and can be tailored to fit each investor’s preferences and requirements

    Examples:

    • Attractive diversification benefits
    • “Best of” asset allocation model
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