What are Structured Investments?

structured investments

When you invest, you aim is to maximize your returns over a period of time. Structure Investments are a form of investment that can give you potentially higher return than fixed deposits. However, it comes with potentially higher risks.

Structure Investments are investment product offered by financial institutions. These investments are linked to the various underlying assets such as interest rate, foreign exchange, equities, fixed income instruments or market indices.

Main Features of Structured Investments

Fixed term investments which may be held to maturity depending on the features of the products. If encashed or redeemed before maturity, your investments may lose part of the return or/and principal.

Structure investments can be either be principal protected or non-principal protected. The risk involved in non-principa protected structure investments are much greater than principal protected structure investments. This is because there is no guarantee on the amount of money you will receive on non-principal protected structure investments even you hold them to maturity


The returns on structured investments vary, are usually not guaranteed and are dependant on the performance of the underlying assets during the investment period. You may incur losses if the performance of the underlying assets differs from what you have anticipated. The return on certain structured investments may also be subjected to foreign exchange risks.

Non-principal protected structured investments usually give higher returns compared to principal protected investments due to higher risks involved.

You can use structured investments for income or growth purposes. However, in view of potential risks involved. you should ensure that structured investments are part of your portfolio in investments / assets which also include low risks assets such as fixed deposits.

Dual Currency Investments

Dual Currency Investments (DCIs) are a form of structured investment where you are exposed to forengn currency risks. Under this structure, your investments are made in one currency (called base currency).

At maturity, depending on the exchange rate, your banking institution has the option to pay out the principal in the base currency or in alternative currency (called alternative currency).

If you are paid in the alternative currency, you could incur loss on your principal when you convert back to the base currency if the foreign exchange rates did not move in the direction you anticipated. You can select both the base and alternative currency.

Factor for Consideration before Investing in Structured Investments

Structured investments are complex products and may not be suitable for all investors. They are intended as “buy and hold” investments and are not liquid investments.

You must ensure that you have fully understood all the features of the investment before you make any commitment. Do not make any commitment in a rush or be influenced by the marketing staff without having sufficient understanding of the product.

Remember that you may have to bear all the fees, expenses and/or investment losses if you decide to sell it or switch to another product before it matures. Seek professional if you need.

Source : Banking Info Booklet

1 comment… add one
  • Beware when you heard the name “Structured” in investment.

    Let’s give you illustration on how DCI works.
    First, banker offer you very attractive FD rate of 9.45% p.a. on EURO for 2 weeks, when EUR/RM is 4.1320. Sound great, right?

    If strike, EUR/RM up to 4.1700 and higher, you will be paid in RM based on 4.1875. Else, you will get back your EURO+9.45%p.a.x14days.

    What I am giving you is a REAL case.

    In less than 1 week, EUR/RM up to 4.2356 so whoever invested in effectively “loss their principal. Read my blog, I will share the Excel that illustrate very clear how this scheme works. Gain is limited but loss is unlimited. This is so call structured.


Leave a Comment