Riskier structured products with 60% barriers could be 'shockers' of the future, says insider
Capital-at-risk products with a 60% barrier have crept into the retail market and are becoming increasingly ubiquitous. But is the extra risk they pose appropriate for retail investors?
The sale of capital-at-risk products with a 60% barrier could be a move the industry will regret in the future, according to one market expert.
These products, which lose capital generally on a one-to-one ratio if the underlying falls by 40% or more, offer a higher coupon than those with a 50% barrier because there is marginally more chance the index will hit the barrier and lose the investor money.
The industry norm for capital-at-risk barriers is "generally understood" to be at 50%, says Gary
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