Structured investments refer to any investment strategy that combines traditional financial instruments, such as stocks and bonds, with complex financial derivatives, primarily made up of options. These investment vehicles are often custom-designed to meet the specific needs of investors seeking returns that differ from traditional market returns.

Structured investments shield investors from market volatility and provide access to markets.

Structured investments provide investors with structured products that combine multiple financial derivatives into a single investment vehicle. These derivatives include call and put options on currencies, commodities, stocks, and bonds. By combining these derivatives, issuers can create investments with returns that are linked to underlying assets? price movements without necessarily owning them.

Structured investments are used in financial industries for a variety of purposes, primarily to hedge against risks in other investments, such as stocks and bonds. For example, an investor who owns a portfolio of high-risk small-cap stocks might use structured investments to hedge against any potential losses in the equity market. Another common use of structured investments is for income generation. Structured investments can provide investors with regular payment streams, often backed by a particular counterparty or a portfolio of underlying securities.

In summary, structured investments provide investors with a flexible tool for exposure to different asset types. They can also help investors hedge risks effectively. Financial experts must understand how to use structured investments to maximize returns, minimize risks, and achieve individual and group investment strategies.