People keen on investing in financial assets and commodities would always look for some benefits that the scheme would offer. After all, they are contributing their hard-earned money to the investment. They are searching for better and higher returns so that it is sufficient for them to fulfil their needs. A person has many responsibilities towards fulfilling the requirements of the family.
Structured products are gaining popularity considering the market volatility in recent years. Investors can benefit from the market upside by investing in them and limiting the risk during the economic downturn. Here are the benefits they offer:
- Capital protection: Most of the structured finance products come with capital protection features, making them suitable for risk-averse investors. All kinds of investors in the market can invest in them to benefit from the diversification.
- Customised view: Since these products are highly customisable, it enables investors to view the market for two to three years specifically and then monetise it. They can choose their products according to market performance and gain decent returns from them.
- Risk return dynamics: Investing in these products help investors boost their portfolio returns. They have various growth assets and derivatives to manage risk efficiently and provide substantial returns on investment.
- Higher return potential: Along with capital protection, structured products in India can also generate attractive returns to investors depending on the index’s performance linked to the underlying asset. They can utilise these returns for other expenses or invest them in other financial products.
- Hybrid exposure: Most of the structured products investors get exposure to two or more asset classes and a mix of traditional and non-traditional assets for portfolio diversification. They can find a combination of investments to improve their portfolio and earn maximum returns.
- Tax efficiency: Structured investment products are now attracting high net worth investors and institutional clients due to their tax efficiency. When it comes to the tax treatment of such products, long term capital gains levy a tax of 10 per cent for investments held more than 36 months. They also include a surcharge for listed market linked debentures. Considering their complexity, all individuals should consult tax experts and seek professional advice before investment.
The volatile market has created the need for a financial product to sustain during all seasons. Investment solutions like these are highly customisable, tax-efficient, and offer attractive returns with capital protection. They are apt for high-net-worth investors. Professional design, management, and diversification provided by these products effectively manage the risk and enhance the return.