15% interest – seriously?
Yes, really. But even so, anyone who sees promises of high interest rates should always take a close look and understand what is behind them.
At the moment, I often receive messages such as: “Should I sell everything now?” or “I can hardly sleep because of my investments.” Especially in times like these, when the market is moving sideways or slightly downwards, structured products can be a cool addition to classic direct investments.
What exactly are structured products (and why do they sound so complicated)?
Think of structured products as a financial cocktail: a little security, a little return potential – well shaken, not stirred.
They roughly consist of:
- A solid component (e.g., a bond),
- And a derivative that adds the “pep” – i.e., protective mechanisms or extra returns.
It sounds complex, but it works quite logically: you often get attractive interest rates in return for accepting a certain amount of equity risk.
Example: Barrier Reverse Convertible (or BRC for short)
The BRC is something of an “all-rounder” among structured products. It pays you double-digit interest rates, even when the market is reluctant to move.
What you get:
🔹 Downside protection up to a certain barrier (your safety net).
🔹 Interest rates – and not just a little.
🔹 Predictability, even when the market is experiencing mood swings.
But what you absolutely need to know is that if the barrier breaks, the stock comes into play—and you bear the price risk. In other words, don’t overlook the barrier like you would the fine print in a contract.
Why this is interesting right now
Because we are in a phase where many investors are nervous—understandably so. And that’s exactly when a targeted addition such as a BRC can help:
- It generates regular income,
- works even in sideways markets,
- and may help you sleep better again.
Of course, it’s not a miracle cure – but it is a pretty clever tool when used correctly.
