Benefits of Adding Structured Notes to Your Investment Portfolio
The global structured notes market has been on the rise, reaching a staggering $3 trillion in total value. But what exactly are structured notes and why should investors consider adding them to their portfolios?
Structured notes are hybrid securities issued by financial institutions, combining elements of both debt and equity. The performance of these notes is linked to the performance of an underlying stock, providing investors with a unique investment opportunity.
Historically, structured notes have been limited to high-net-worth individuals, but alternative investment platform Yieldstreet has made these offerings more accessible to a wider range of investors. With low minimum investments and short durations, Yieldstreet offers a variety of investment themes, including consumer, diversified, and tech portfolios.
There are several benefits to adding structured notes to your portfolio. Firstly, structured notes provide protection against market fluctuations, ensuring a risk-adjusted return even in declining markets. This makes them attractive to investors seeking stability and diversification in their portfolios.
Additionally, structured notes offer predictability, with all conditions and outcomes set forth upfront. Investors know the maturity dates and potential returns, allowing for better financial planning and risk management. Diversifying portfolios with structured notes can also help mitigate overall risk and improve returns.
One of the key advantages of structured notes is that market growth is not necessary for returns. Unlike traditional equity investments, structured notes can provide profits even in flat or modestly increasing markets, as long as the underlying asset allocation exceeds initial levels.
In conclusion, structured notes offer a range of benefits for investors looking to diversify their portfolios and generate steady income. While every investment carries some level of risk, structured notes can provide stability and potential returns even in uncertain market conditions.
Source: Yieldstreet