How Safe is Your Investment in Structured Products

There are quite a number of structured products out there now sold by financial institutions including banks, insurance companies and takaful operators. Investors should know that most of these products are capital-protected, which is not the same as capital guaranteed.

The capital protection is linked to the credit of the underlying investments. With the latest Lehman event, investors in Hong Kong and Singapore who purchased Lehman-linked minibonds may stand to lose most or all of their original investment.

So make sure you fully understand the risks before purchasing such capital-protected structured products.

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