Trustnet Limited (“we”, “our”, “us” and derivatives) are committed to protecting and respecting your privacy. This Privacy Policy, together with our Terms of Use, sets out the basis on which any personal data that we collect from you, or that you provide to us, will be processed by us relating to your use of any of the below websites (“sites”).

For the purposes of the Data Protection Act 1998, the data controller is Trustnet Limited of 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Our nominated representative for the purpose of this Act is Kirsty Witter.


We collect information about you when you register with us or use any of our websites / services. Part of the registration process may include entering personal details & details of your investments.

We may collect information about your computer, including where available your operating system, browser version, domain name and IP address and details of the website that you came from, in order to improve this site.

You confirm that all information you supply is accurate.


In order to provide personalised services to and analyse site traffic, we may use a cookie file which is stored on your browser or the hard drive of your computer. Some of the cookies we use are essential for the sites to operate and may be used to deliver you different content, depending on the type of investor you are.

You can block cookies by activating the setting on your browser which allows you to refuse the setting of all or some cookies. However, if you use your browser settings to block all cookies (including essential cookies) you may not be able to access all or part of our sites. Unless you have adjusted your browser setting so that it will refuse cookies, our system will issue cookies as soon as you visit our sites.


We store and use information you provide as follows:

We may also send you emails to provide information and keep you up to date with developments on our sites. It is our policy to have instructions on how to unsubscribe so that you will not receive any future e-mails. You can change your e-mail address at any time.

In order to provide support on the usage of our tools, our support team need access to all information provided in relation to the tool.

We will not disclose your name, email address or postal address or any data that could identify you to any third party without first receiving your permission.

However, you agree that we may disclose to any regulatory authority to which we are subject and to any investment exchange on which we may deal or to its related clearing house (or to investigators, inspectors or agents appointed by them), or to any person empowered to require such information by or under any legal enactment, any information they may request or require relating to you, or if relevant, any of your clients.

You agree that we may pass on information obtained under Money Laundering legislation as we consider necessary to comply with reporting requirements under such legislation.


We want to ensure that the personal information we hold about you is accurate and up to date. You may ask us to correct or remove information that is inaccurate.

You have the right under data protection legislation to access information held about you. If you wish to receive a copy of any personal information we hold, please write to us at 3rd Floor, Hollywood House, Church Street East, Woking, GU21 6HJ. Any access request may be subject to a fee of £10 to meet our costs in providing you with details of the information we hold about you.


The data that we collect from you may be transferred to, and stored at, a destination outside the European Economic Area (“EEA”). It may be processed by staff operating outside the EEA who work for us or for one of our suppliers. Such staff may be engaged in, amongst other things, the provision of support services. By submitting your personal data, you agree to this transfer, storing and processing. We will take all steps reasonably necessary, including the use of encryption, to ensure that your data is treated securely and in accordance with this privacy policy.

Unfortunately, the transmission of information via the internet is not completely secure. Although we will do our best to protect your personal data, we cannot guarantee the security of your data transmitted to our sites; any transmission is at your own risk. You will not hold us responsible for any breach of security unless we have been negligent or in wilful default.


Any changes we make to our privacy policy in the future will be posted on this page and, where appropriate, notified to you by e-mail.


Our sites contain links to other websites. If you follow a link to any of these websites, please note that these websites have their own privacy policies and that we do not accept any responsibility or liability for these policies. Please check these policies before you submit any personal data to these websites.


If you want more information or have any questions or comments relating to our privacy policy please email [email protected] in the first instance.

Keyword Search

 Calculator Calculator
Time Zone Time Zone
You are here:  FE Trustnet     Education        Structured Products

Structured Products


Structured Products
Look anywhere for an answer to the question, 'what are structured products?', and you will find no single, common response. Investors and their advisors will be met with a range of options - from the individually-designed, to a diverse range of off-the-shelf offerings.
This is the point: they are bespoke investment vehicles, either tailored to meet the aims of a (necessarily, high net worth) individual, or intended for a general retail offering but with a risk/reward profile designed to achieve a specific set of objectives.
These objectives will generally combine an element of capital protection - possibly even a full return of capital guarantee - with a degree of participation in the return from a higher-performing, but riskier, underlying asset.
The variety in the design and the providers of these instruments counters the enquirer's original question with the fundamental consideration here: 'what do you want your structured investment to be?'
The London Stock Exchange (LSE) says that "the term 'structured products' simply refers to a group of financial instruments with varying terms, payout and risk profiles on a range of underlying assets." They fall into broad categories, not all of which are either available or suitable in the retail marketplace.
Ultimately, the product structure will be set out transparently in its literature, and the investor should be able to assess the maximum and minimum returns that could be expected. And if this is not the case, the investor should be very sure about the proposition they're considering.
This guide aims to explore some of the more common retail forms of this type of investment.

The asset class now known as structured products has been evolving for some time. Its roots lie in the guaranteed bonds marketed by life offices from the 1970s onwards. But a trigger was required if any significant departure from established themes were to be possible.
The first shift came with the establishment of the London International Financial Futures Exchange (LIFFE). This created a market in financial derivatives - options - that for the first time allowed their purchasers to take advantage of equity market movements without being exposed to ownership of the equities themselves.
Confidence in the use of derivatives - and in the quality of the financial institutions backing them - soon grew to the point where providers were constructing new, composite offerings: an early form of structured products.
The first of these to be launched on the retail market were the guaranteed equity bonds that made their debut in 1991. Little was to change in the concept behind these rather basic products until the early 21st century, and their simplicity may account for the lukewarm reception they met among more sophisticated investors.
In 2002-2003 a form of structured investment which came to be known as 'precipice bonds' made the news. These offered higher market participation, promising big returns in rising markets, but at a cost of a punishing downside penalty, and little in the way of a safety net if the markets should fall. The markets did slide, and many bondholders found themselves bearing a 2% drop in their investment for every 1% of market fall.
It is no surprise that precipice bonds are rarely to be seen these days.
The Market Today
If the precursors to today's products were seen as unsophisticated, inflexible or - in the case of precipice bonds - downright ruinous to financial health, things have now moved on considerably.
With the arrival of wrappers like PEPs, TESSAs and ISAs, more tax-efficient vehicles became available to UK investors. Moving underlying investments into offshore domiciles has created further tax savings.
In recent years, the providers of these products have explored ever more innovative combinations of underlying asset mixes which have, in combination with relatively benign market conditions, enabled them to offer a wider range of terms and guarantees.
These instruments have become so popular today that, in May 2005, the London Stock Exchange created a new market segment to accommodate them; the government-backed NSI (National Savings & Investments) has issued £800 million in such products over the past two years; in 2004, the UK market for them attracted around £6 billion of new investment, and hundreds of new issues were launched.
It is fair to say that structured products are moving into the mainstream, as more and more providers develop and market them.
Next Section »

Back to top of pagetop