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Structured products are innovative and flexible investment instruments that represent an attractive alternative to direct investments (such as shares, bonds, currencies, etc.). Thanks to their flexibility, they lend themselves to investment solutions to suit any risk profile, even in challenging market situations.

Structured products are defined as investment instruments publicly issued by securities issuers whose redemption value is linked to the performance of one or more underlying assets. Investments such as equities, ETFs, funds, interest, foreign currencies or commodities serve, for example, as underlying securities for structured products.

Structured products are composed of a combination of a classic investment (such as a bond) and a derivate financial instrument (for example, a call option). According to the derivative strategy selected, a suitable product can be designed to fit any market expectation (positive, stagnant, negative) and any risk profile (conservative, balanced, aggressive).

Legally, structured products are bonds or debt obligations payable by the issuer. The issuer is liable for their fulfillment to the full extent of his assets. This makes a structured product issuer’s creditworthiness of paramount importance to the investor. Structured products are not collective investments, and investors do not enjoy the special legal protection provided by Switzerland’s Collective Investment Schemes Act (CISA).

Structured products as an asset class are important to both asset management and the Swiss financial center as a whole. As relatively new products, their considerable growth over recent years has made them a significant part of Switzerland’s economy. Today, they are directly or indirectly responsible for more than 3,000 highly skilled jobs. According to information from the Swiss National Bank, approx. CHF 200 billion in Swiss custodial accounts is currently invested in structured products (assets under management). This corresponds to 4% of all assets under management in Switzerland.

The Swiss Structured Products Association (SSPA) publishes the latest figures on their market volume on its website at: sspa.ch

Categorization

SSPA Swiss Derivative Map

The SSPA categorization model consists of three hierarchy levels. At the top level, the model distinguishes investment products from leverage products. These two main categories are made up of five product categories on the second level, ranging from the low-risk capital protection products to the higher risk leverage products with knock-out.

On the third hierarchy level, each of these five product categories comprises a number of specific product types. These product types illustrate how a single structured product functions by means of its respective payoff diagram.

The descriptions also provide further information on the investor’s market expectations as well as product-specific characteristics.

Download SSPA Swiss Derivative Map ©

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Capital protection products

provide efficient protection against falling prices. As a rule, capital protection ranges from 90% to 100% of the nominal value applicable on product expiry. As with bonds, there can be price fluctuations throughout a structured product’s life, hence the product can also trade under capital protection. Generally, the growth potential of capital protection products is lower than that of other products and may even be limited. The investor has, nevertheless, the chance of significant earning potential without foregoing capital protection.

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Yield enhancement products

are suitable for sideways-tending markets, with the investor foregoing full participation in the underlying security’s price increases. The threshold of participation is called the cap, from there any possibly yield is capped. In return for surrendering the full upward growth potential, the investor is given a coupon, called a reverse convertible, or a discount on the underlying security (discount certificate). If the underlying security declines sharply and falls below the cap or the barrier (barrier reverse convertible), the investor shares fully in the loss as he would have with a direct investment in the underlying security. The coupon is redeemed in any case.

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Participation products

share fully in the underlying security’s price movements, with no up or down limitations. Depending on the product structure, some products share in parallel with such price movements (tracker certificates), others come with additional mechanisms. For instance, the participation rate of outperformance certificates goes up beyond a previously specified threshold. Bonus certificates pay a bonus even if the price of the underlying security fails to increase but moves sideways. In both cases, the investor is prepared to forego dividends.

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Leverage products

are suitable for short-term speculation or hedging. Best-known among them are put and call warrants with a fixed lifetime, as well as mini-futures and warrants with knock-out, which expire early once a barrier has been reached (stop-loss, knock-out). All leverage products, as the name suggests, follow the price movements of the underlying security with a leverage mechanism. In the worst case, it can lead to total loss limited to the capital invested.

Certain products and services of the Julius Baer Group are not accessible to residents and/or nationals of certain countries. Website users are therefore asked to consult the Terms of use applicable to this website and to contact their nearest Julius Baer entity (“Locations”) for information on products and services available in their country. Furthermore, users may consult their legal/tax advisors should they require any clarifications on the interpretation of the Terms of use.

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Julius Baer Structured Products Legal Disclaimer Switzerland

Please read the following terms of use and legal information carefully.

Legal regulations Switzerland
  1. In General
    1. Agreement

      By using the website www.juliusbaer.com and any of its pages (hereafter the "Site"), you confirm that you have reviewed, understand and agree to the following important legal information and terms of use (the "Terms").If you do not agree to the Terms, please exit the Site immediately.

The Terms are subject to change at any time without notice and access to, and use of the Site may be restricted or terminated at any time.

Access to and use of the Site as well as the Terms are governed by Swiss law. The place of jurisdiction is Zurich.

    1. No offer, no advice

      The information, products, data, services, tools and documents contained or described on this site (the "Content") are for information purposes only and constitutes neither an advertisement or recommendation nor an offer or solicitation to buy or sell investment instruments, to effect any transaction or to enter into any legal relations.

      The financial products mentioned on this site are not suitable for all investors. The information contained on this site represents no financial, legal, tax and/or any other recommendation whatsoever. Investment decisions or other decisions should not be made exclusively on the basis of this document. Prior to making any investment decisions, we recommend that you seek a thorough review as well as advice from a qualified specialist.

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      Julius Baer provides no warranty and makes no representations of any kind whatsoever regarding: (1) the currency, accuracy or completeness of the content; (2) the results to be obtained by any user of the Site; or (3) any third party content accessible on or through the Site.

      Any data, including but not limited to financial market data, quotes, notices, research or other financial information accessible through this Site, have been obtained from carefully selected sources believed to be reliable. All such information is provided "as is" to the user without express or implied warranties of any kind, including warranties of quality, originality, non-infringement of intellectual property or fitness for any particular purpose. The fact that a user accesses the Site does not make him a client of Julius Baer. Any expressions of opinion, estimates and projections on the Site are those of the authors at the date of writing. They do not necessarily reflect the view of Julius Baer and are subject to change at any time without prior warning. Julius Baer and its contractual partners may discontinue, or make changes in, the information, data and documents, and the products or services described herein, at any time without prior notice. Any information marked with a date is published as of this date only and no obligation or responsibility is undertaken to update or amend any such information.

    3. No liability

      TO THE MAXIMUM EXTENT PERMITTED BY CURRENT LAWS AND/OR REGULATIONS, JULIUS BAER, INCLUDING ITS DIRECTORS, AGENTS, EMPLOYEES, SUB-CONTRACTORS AND ITS SALES PARTNERS DISCLAIM ANY AND ALL LIABILITY FOR LOSSES OR DAMAGES OF ANY KIND WHATSOEVER ARISING DIRECTLY OR INDIRECTLYAS A RESULT OF (1) THE CONTENT, ACCURACY, COMPLETENESS OR OTHERWISE OF THE CONTENT OR ANY LINKS OR THIRD PARTY CONTENT; (2) ANY ERRORS IN OR OMISSIONS FROM THE SITE; (3) USE OF OR ACCESS TO THE SITE; (4) ANY INABILITY TO ACCESS OR USE THE WEBSITE FOR ANY REASON. TO THE FULL EXTENT PERMITTED BY CURRENT LAWS AND/OR REGULATIONS, JULIUS BAER SHALL NOT BE LIABLE FOR ANY (1) LOSS OF PROFITS OR REVENUE OR SAVINGS OR OTHER ECONOMIC LOSS, (2) LOSS OF BUSINESS OR GOODWILL, (3) LOSS OF OR DAMAGE TO DATA, (4) INCIDENTAL OR SPECIAL LOSS, (5) WASTED OR LOST MANAGEMENT TIME, OR (6) INDIRECT OR CONSEQUENTIAL LOSS ARISING FROM USE OF OR ACCESS TO THE SITE, EVEN IF ADVISED OF THE POSSIBILITY OF ANY SUCH LOSS OR DAMAGE OR IF SUCH LOSS OR DAMAGE WAS FORESEEABLE.

    4. Proprietary information

      Unless accompanied by an explicit statement to the contrary, all content on this Site is protected by copyright, database rights, or other intellectual property rights, and is the property of Julius Baer. Nothing on the Site is designed to grant any license or right to use any image, text, trademark or logo. No act of downloading or otherwise copying from the Site will transfer any legal entitlement to any software or material on the Site to you. Julius Baer reserves all intellectual property rights (such as copyright, design and trademark rights) to all material on the Site, and will enforce such rights to the full extent of applicable law. Any reproduction, re-publication or distribution of site content requires the express written authorization of Julius Baer as well as the explicit source data.

    5. Proprietary information

      Unless accompanied by an explicit statement to the contrary, all content on this Site is protected by copyright, database rights, or other intellectual property rights, and is the property of Julius Baer. Nothing on the Site is designed to grant any license or right to use any image, text, trademark or logo. No act of downloading or otherwise copying from the Site will transfer any legal entitlement to any software or material on the Site to you. Julius Baer reserves all intellectual property rights (such as copyright, design and trademark rights) to all material on the Site, and will enforce such rights to the full extent of applicable law. Any reproduction, re-publication or distribution of site content requires the express written authorization of Julius Baer as well as the explicit source data.

    6. Material interests

      Julius Baer and/or its board of directors, executive management and employees may have or have had interests or positions or traded or acted as market makers in securities referred to on the Site. Furthermore, such entities or persons may have or have had a relationship with or may provide or have provided corporate finance or other services to or serve or have served as directors of companies referred to on the Site.

    7. Performance

      The past is not an indication of the future performance of an investment. The value of investments may be subject to fluctuations and investors may not get back the amount invested. Changes in rates of foreign exchange may also cause the value of investments to go up or down.

  2. Structured Products

    Access to data under the section "Structured Products" is designated exclusively for visitors to the site with domicile in Switzerland. Access to the section "Structured Products" is prohibited for visitors to the site from other countries, and these users must exit the website.

    Data under the section "Structured Products" serve as information only and constitute neither a solicitation nor invitation of an offer. Any buy or sell offer is provided only with the complete documentation, which particularly points out the risks associated with these financial products and can be obtained from Bank Julius Baer & Co. Ltd. (tel. +41 (0) 58 888 81 81, Structured Products Team, Hohlstrasse 604/606, 8010 Zurich). Investors are urged to read this documentation carefully since they provide the conditions under which an investor can invest in the product. Please note that conversations conducted on our trading telephone can be recorded. Structured products do not represent participation in a collective investment and are thus not subject to supervisory authority by the Swiss Financial Market Supervisory Authority (FINMA). Investors are therefore not protected under the Swiss Federal Act on Collective Capital Investments (CCIA) and are thus exposed to issuer risk.

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