Commerzbank structured products review

  • You do get limited downside protection against falling markets
  • Used in a careful and limited way, they aren’t always super high-risk.
  • These structured notes don’t pay dividends. This can make a huge difference, as the graph below shows:
  • There are a lot of hidden costs and risks. In terms of the risk, there are many moving parts. As an example, let’s say you have 4-5 investments within the note, and they are all based on different currencies and markets. If even one of the investments reduces by 35% or more, you could lose a lot of money. 35% seems like a lot, but in recent years, many emerging market currencies have fallen by 35% or more, dragging down the USD portion of the investment.
  • Markets usually go up long-term. So often people don’t need the protection barriers
  • Complexity can be your enemy in investing
  • Sold together with some high-fee expat investments, and those fees can eat into the returns

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Owner at adamfayed.com.

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