How to reduce portfolio risk using structured products

STRUCTURED PRODUCTS

Structured products offer distinct advantages for actively managed portfolios. Paul Burgin explains why

Advisers and discretionary managers traditionally placed structured products in their ‘other’ allocation buckets but this may be changing. Many now consider structured products as more bond-like solutions. “At the outset, a large part of the product is effectively a bond,” says Marc Chamberlain, executive director of provider Morgan Stanley. He believes structured products can be used to offset risks in active equity management. A typical example involves UK equities. Chamberlain suggests advisers consider diversifying their exposure to active managers, and therefore manage risk, b...