Tan Kin Lian's Blog: Good experience with structured products

Monday, July 16, 2007

Good experience with structured products

THERE WAS NO RESPONSE TO MY PREVIOUS POSTING OF THIS BLOG. I AM RE-POSTING IT TO INVITE CONTRIBUTIONS, ESPECIALLY FROM THE FINANCIAL INSTITUTIONS THAT HAVE MARKETED THIS PRODUCT.

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Do you have any good experience with structured products, e.g. promise capital protection and give you a good return?

Send the following details to kinlian@gmail.com:

* amount that you invested
* period of investment
* your total return
* fully capital protected (ie no risk)?

Note: This request is also open to the financial institutions that promoted or marketed the structured products. You can send good experiences to me (if any), so that my blog will be more balanced.

7 comments:

Anonymous said...: Mr Tan,

Can you tell us which of the following financial products has a higher commission/expense ratio – an annuity (which you love so much) or a structured product (which you disdain)?

Is it a case of the kettle calling the pot black?; July 05, 2007 8:06 PM
Anonymous said...: Relationship manager or whatever title they go by is no difference from insurance agents. They are sales persons.They manipulate the sales process. They up play and down play; and non-disclosure and misrepresentation are among tactics they employ.MAS or CASE should come hard upon these people. This is the high risk group consumers should beware.; July 05, 2007 10:08 PM
Anonymous said...: Maybe you like to comment on the Minibonds and Pinnacles. Both recieved overwhelming response from the public. What i know they are products designed for people who want streams of income. The tenor is 3-5 years with step up options with higher returns.
Since they are well recieved they must be good. Investors don't throw away $150mil.for each tranche for nothing.
There had been quite a few tranches already.; July 16, 2007 1:36 PM
Tan Kin Lian said...: Dear Anonymous

Can you give specific examples of the earlier series of the Minibonds and Pinnacle Notes. How well have they performed? Did they provide good value to the investors?

I have highlighted some of the current features of these products. They contain an element of speculation and carry a risk that has not been properly assessed.; July 16, 2007 1:44 PM
Tan Kin Lian said...: From the postings in my blog, those who advocated structured products appear to be the marketeers of these products.

They give the same marketing pitch, for these products - namely, it is relative safe and give a better return.

I have not seen any concrete example about an actual product that has matured and give a good return to the investor (commensurate with the risk and opportunity).

I am still waiting for these real examples (not marketing pitch).; July 17, 2007 11:08 AM
Anonymous said...: What i can tell you is that from the series number they have already marketed many tranches.These synthetic notes are new in Singapore in that they are made available to small investors just about a year or two. So far have not heard of any defaults. The investors receive an annuity coupon quarterly or semi annually just like bonds.The return is as stated.
These products have been sold to high networth individuals.In Hong Kong they are at abt 40th series now and no defaults because the credit entities are highly rated.
The first series may be maturing next year.; July 17, 2007 2:00 PM
Anonymous said...: anonymous "2:00PM" dude,

* popular does not mean good
* no default does not mean no risk

If the risk is so insignificant, then you are short-changed --- the structured product has incurred additional costs on swaps and options which are used to hedge the risk.; July 19, 2007 12:14 AM