The last 1,000 structured capital-at-risk products to mature in the IFA distributed sector made an average annualised return of 8.27 per cent, according to figures from Lowes Financial Management.
The company’s website: structuredproductreview.com collates records of maturities and displays offers of products available through IFAs. It showed 83.5 per cent of the capital-at-risk products matured with a gain, while 12.5 per cent returned just the investor’s original capital. Only 40 products matured with a loss.
Ian Lowes, Structuredproductreview.com founder and managing director of Newcastle-based Lowes Financial Management, said: “While structured deposits or capital-protected products may be an option for the most conservative investor, capital-at-risk plans offer more attractive potential returns for original capital being put at the risk of loss.
“A significant number of products in the market have been constructed with 50 per cent barriers, which means that regardless of the type of barrier the underlying asset would have to lose half its value at some point before a loss could occur.”
Marvin Evans, principal at Gloucestershire-based Old Bank Wealth Management, said: “I tend not to use structured products and, when I have, they have not necessarily worked out.
“Often when they are related to indices, it attracts cautious people who only tend to go into the market when the general feeling is good, and that’s often the time when markets are about to fall.”