Market Still Presents Opportunity for Returns

Summary

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The New Year has not begun well for investors. This week was depressing for anyone invested in shares, either directly or in collective investment funds. Such periods are nothing new and I suspect that the rest of this decade will see further periods when nerves are tested. However, you are unlikely to be investing for the short term and one needs to look at the returns over five or ten- year periods. Market corrections always present opportunities and one such may well be in the so-called "structured product" arena.

These are fixed-term products which align their returns to the performance of one or more world stock market indices. Sometimes they come with a cast iron capital guarantee or with a limited guarantee. It was unusual to find such products within fund managers' portfolios but increasingly fund managers are using them to protect fund performance. Unlike an open-ended fund where the return in a few years' time is unknown, structured products offer a reasonable idea of what that return might be. They may also offer a regular fixed income.

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Extract

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Market Still Presents Opportunity for Returns

With interest rates likely to move lower and the FTSE 100 Index lower than it has been for some time, products linking a return to th...

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