The turmoil in financial markets over the past four years has caused investors to become more risk averse. Wealth preservation has become the most important investment objective for many investors but they still have to place their money where they think it will achieve the best return for a given level of risk. . The dilemma facing them, however, is that they must be prepared to accept higher levels of risk to achieve higher returns.
Structured deposits offer a solution to this by enabling investors to manage their risk exposure for a given level of potential return. The opportunity cost is the risk free rate of return that would otherwise be earned over the same investment term. Investors must therefore evaluate the trade-off between these returns in their quest for better performance.