Sunday, July 08, 2007

Structured Investments

DBS Bank has a good webpage. It shows the structured investments marketed by them over the past years, and are still current. You can find out quite easily the current indicative price of these investments.

The structured investments are listed under the following categories:

Credit linked notes - 5 tranches
Currency linked deposits - 4 tranches
Equity linked deposits - 19 tranches
Index linked deposits - 47 tranches
Interest rate deposits - 76 tranches
Total: 141 tranches

Based on the prices posted in this website, it seems that most of the investments are below par, ie less than 100% in prices. In the worst case, the drop is more than 30%, if the investor cash out now.

There are just a few tranches under "indexed linked deposits" which show an apprecation of up to 24% for the period (about 4 years) that the investments were held. The annual return is about 5-6%.

It seems that most of the structured products performed poorly, and gave a poor return.
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1 comment:

Anonymous said...

Dear Mr. Tan,

You did the right thing by publishing this on your blog. We trusted the professionalism of DBS employed Relationship Managers and trusted a local bank (majority owned by Temasek) with our hard earned money to see the DBS Structured Investments sold to us over the past 5-6 years went under. The only consolation from the bank is free Ang Pow packet (no money inside) during CNY season. Only if you dare ask for it after long queue.

In the papers, their CEO was handsomely paid for the bank's achievements. Is this fair for those who had invested in DBS Structured Investments? What a horrible world?

To those that read Mr. Tan's blog, listen to him, don't put your money in complicated Structure Investements even it is from a reputable bank. I like to add... the Relationship Managers employed by the bank give you privilege banking to park your hard earned money only to see them building treasures for their CEO.

July 09, 2007 10:29 PM

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