Structured Investments utilize various trading techniques to provide a range of unique risk reduction and diversification strategies. Structured Investments can complement or serve as alternatives to ETF and Index Fund investments.
Our income is derived solely from our clients, our loyalty is to our clients, not a large bank.
Structured Investments
Structured Investments provide investors with defined outcomes during times of market uncertainty. They provide returns based on underlying assets with scenarios that include partial downside protection and potentially enhanced upside returns. There are many available Structured Investments today, however, not all are created equal. Once known as Wall Street’s Best Kept Secret, Structured Investments have grown in popularity as a hedge option in clients’ portfolios.
Benefits of Structured Investments
- Defined outcomes, ability to monetize a particular market view
- May provide partial downside principal protection, dependent on contract terms
- Potentially enhanced upside returns (in most cases up to a maximum return), dependent on contract terms
- Repeatable strategies
- Add extra diversification to a portfolio; reduces risk of loss versus individual stocks or ETFs
- Volatility and risk reduction on an underlying investment
- The ability to earn a positive return in low yield or flat equity market environments.
- Tax-efficient access to fully taxable investments
Blue Bell Private Wealth Management Advantages in the Structured Product space
- Ability to negotiate advantageous terms for our clients through comprehensive bid comparison process; enabled by:
- Decades of experience in the space and ongoing dialogue with the major counterparties
- Access to a market that is difficult for individuals to enter
- Time-Tested Proprietary Investment Models allow us to asses bit quality in real time
- Access to digital notes: Can provide positive returns in an unchanged market
- Managed Ladder Portfolios: Thoughtful strategy, not random product placement
- Complementary to other risk-off allocations: Enhances covered call writing strategy
Benefits of the BBPWM Structured Investments Ladder
- Eliminates market timing
- The more rungs in the ladder, the more stable your return
- Creates steady cash flow
- Reduces reinvestment risk
- Reduces the negative of upside return caps
- Potential to adjust strategy and take advantage of market conditions
- Reinvestment advantages during declining markets
Structured Investments Drawbacks and Our Mitigation Strategies
- Potential lack of market liquidity: Our trading team negotiates the terms of these investments with the major counterparties, who use the proceeds as a funding source. We can get the best terms only if you hold to maturity (generally a 13 month term). Because of this, we allocate long-duration funds to this strategy, and maintain a separate liquidity buffer.
- Possibility of no dividend: Our trading team incorporates differences in distributions into their models when analyzing relative value between structured products and other asset classes.
- Must hold to maturity to realize the full potential of downside protection and upside enhancement: These investments are best suited for those who can hold them for the full 13-month term
