Big Take Structured Products Are Back. Why the Boom and What’s the Catch?
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Sep 18, 2025 Sam Potter, Bloomberg's markets editor, dives into the world of structured products—complex investment vehicles designed to reduce downside risk amid volatile markets. He explains how these hybrid bond-options work and why their popularity is surging, especially among wealthy investors seeking stability. Potter also highlights critical concerns, including hidden costs and the lessons learned from past financial disasters like Lehman Brothers, reminding us that no investment is truly risk-free.
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Structured Products' Big Comeback
- Structured products are resurging as investors seek alternatives to volatile stocks and boring bonds.
- The US market hit a record ~$194 billion last year and is growing again as uncertainty rises.
Hybrid Bond‑Option Structure
- Structured products are hybrid instruments combining bond-like debt with option-like derivatives.
- That hybrid design aims to offer bond security with the upside of equity exposure.
How Autocallable Notes Work
- Autocallable notes pay coupons if the underlying stays within set ranges and return principal at maturity.
- If an observation date shows the underlying above a trigger, the note gets called early and you get cashed out.