US structured product investors unwilling to abandon capital guarantees

The US structured products market has regained much of the ground it lost after the Lehman Brothers bankruptcy in 2008, but investors and financial advisers are still seeking out principal protection. Many industry participants expected demand for capital-at-risk investments to recover to former levels, but is the need for a financial safety net here to stay?

Within the last decade, US investors have experienced two major financial meltdowns and multiple market downslides. The so-called irrational exuberance of the 1990s' Internet bubble abruptly began losing air in March 2000, followed by 2007's sub-prime mortgage debacle, which led to the bankruptcy of Lehman Brothers in September 2008 and a full-blown global crisis. Despite accusations that investors have short memories, those in the US seem unlikely to forget for some time yet.

Many investors