Structured Products

Structured Products at Bethmann Bank

Individually designed investment solutions
Large selection of issuers
Improvement of the risk/return profile
Independence in product selection (best-select approach)

Structured investment solutions can be an important building block for diversifying your overall portfolio. However, the large number of structured products, each with different functions, is difficult to keep track of. Our investment advisors will help you select the products that suit your market assessment and investment needs.

What you should know about structured products

What are structured products?

Structured products are investment products that combine several financial instruments in a single, tradable product. In most cases, a bond is linked to a derivative component.

The derivative component is linked to the performance of one or more underlyings. Common underlyings include shares and share indices. However, there are also products linked to interest rates, commodities, investment funds or currencies.

What opportunities do structured products offer?

Structured products can be an important building block for diversifying portfolios.

The combination of different financial instruments enables individual adjustment to the investor's risk/return profile. The aim is to find the ideal compromise between the pursuit of returns and the accepted risk.

The wide range of approved underlyings also makes it possible to invest in niche markets or markets that are difficult to access, such as commodities.

What are the risks?

In view of the broad spectrum of structured investment solutions, there is no general answer to the question of risk.

So-called capital protection products even guarantee a minimum repayment at maturity - usually amounting to 100% of the invested capital.

Leverage products such as warrants or turbos react disproportionately to price movements - both when prices rise and when they fall. They therefore not only offer high potential returns, but also a greatly increased risk of loss.

Other structured products are associated with significantly lower risk. Partial protection products such as reverse convertibles or bonus certificates, for example, have built-in mechanisms designed to reduce the risk (compared to a direct investment in the underlying asset).

However, if there is an issuer risk, there may be a risk of total loss if the issuer becomes insolvent, even with capital protection products.

What types of structured products does Bethmann Bank offer?

Bethmann Bank's Structured Products are based on the aforementioned partial and capital protection products, which we would like to explain in more detail here.

Capital protection products:

Products with capital protection guarantee a minimum repayment at maturity. This is usually 100 percent of the invested capital.
The products can either have an interest reference (e.g. fixed-rate bonds, variable-rate bonds) or enable participation in the positive performance of an underlying asset (capital protection certificates).
Due to the guaranteed repayment of the invested capital, these products are primarily aimed at investors with a greater need for security and more moderate income expectations.
If there is an issuer risk, there is a risk of total loss if the issuer becomes insolvent.

Partial protection products:

With partial protection products, the repayment at maturity depends on the performance of the underlying asset.
The products usually offer an upwardly limited but nevertheless attractive potential return. In return, they offer partial protection as long as the underlying asset does not fall below a predefined threshold.
Partial protection products can also generate an attractive return when markets are trending sideways and are therefore particularly suitable for investors who have neutral market expectations.
Partial protection products include express certificates, reverse convertibles, discount certificates and bonus certificates.
If there is an issuer risk, there is a risk of total loss if the issuer becomes insolvent.

Selection process: How we find your individual investment solution

product conception

Together, we discuss initial ideas and develop a product that is tailored to your needs. After obtaining purchase price indications, all relevant product parameters are defined.

2. Tender

This is followed by the so-called beauty contest, i.e. the invitation to tender among several issuers. The two-digit number of approved providers ensures that you always receive conditions that are as close as possible to the best conditions currently available on the market.

3. Selection

As a rule, all offers are available within an hour. We discuss the results together and select an issuer. In addition to the product conditions, the broadest possible diversification of issuers in the portfolio is also taken into account.

4. Closing

After a thorough examination of the product documents, we trade the product with the selected issuer. But the process does not end there. Supporting our clients throughout the entire term is part of an advisory mandate.

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Diversify intelligently

Individual investment advice to diversify your portfolio