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Structured Products in Wealth Management

Structured Products in Wealth Management

Steffen Tolle, Boris Hutter, Patrik Rüthemann, Hanspeter Wohlwend

ISBN: 978-1-118-58040-0 November 2012 256 Pages

 E-Book

$97.99

Description

  • Structured products in the form of equity-linked derrivatives have seen a rapid rise in popularity in the field of wealth management.
  • Structured products are combinations of derivatives and traditional financial instruments such as stocks and bonds. The various components are combined into a single financial instrument and securitized.
  • Discusses the characteristics and practical applications of structured products.
  • In addition to providing a description of the structured products, this book focuses on their practical applications, showing how they can generate added value as part of an integrated investment process.
  • Colourful charts help present the material in an attractive, real-world context.
Preface.

Authors.

Introduction.

Chapter 1. Derivatives.

Introduction.

Definition and overview.

Background and history.

The advantages of derivatives.

Transaction motives.

Forwards and futures.

Forward contracts.

Futures contracts.

Differences between forwards and futures.

Pricing.

Swaps.

Basic types.

Swap replication.

Swap valuation.

Options.

Forms of trading.

Payoff profiles.

Option strategies.

Factors influencing option pricing.

Put/call parity.

Option replication.

Option pricing.

Greek letters.

Exotic options.

Summary.

Chapter 2. Structured Products.

Introduction.

What are structured products?

Definition.

Overview.

Certificates.

Index certificates.

Basket certificates.

Differences between certificates and mutual funds.

Further product developments.

Maximum return products.

Discount certificates.

Reverse convertibles.

Further product developments.

Capital protection products.

Plain-vanilla capital protection products.

Further product developments.

The market for structured products.

Parties involved.

The lifecycle of structured products.

Summary.

Chapter 3. The Investment Process.

Introduction.

Overview of the investment process.

Investor analysis.

The concept of risk/return classes.

Investor analysis.

Strategic asset allocation definition of investment segments.

Determining the strategic weights.

Tactical asset allocation.

Implementation in the portfolio.

The core/satellite approach.

Portfolio management.

Performance reporting.

Return attribution.

Risk measurement.

Summary.

Chapter 4. Using Structured Products in Wealth Management.

Introduction.

The use of structured products in the core portfolio.

Constructing the core portfolio with traditional investments.

Tactical optimization of the core portfolio.

The use of structured products in the satellite portfolio.

Currency management with derivatives.

Risk reporting.

Nominal versus effective exposure: "unbundling".

Effective exposure.

Value-at-risk.

Summary.

Conclusion.

Index.