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Structured Products - High Yield/ Low Risk Investment for Portfolio Diversification - Citi UK

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Structured Products

Structured products - Combine growth potential with protection

Our Structured Products at a glance:

  •   A Structured Product is a hybrid investment made up of a bond and an option

  •   They offer the potential for higher returns on investment compared to a standard deposit

  •   Structured products are low risk investment and possibly receive up to 100% capital protection

  •   Ideal for investors looking for portfolio diversification in asset classes, sectors and geographies 

  •      You must hold the Structured Product until maturity to ensure your initial investment is protected (subject to the credit risk of the issuer)

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  • Benefits and Risks
  • Structured Products at Citi
  • Management and Fees

What is a Structured Product?

Structured products are hybrid investments typically comprising of two components — a note and a derivative, which is often an option. Also known as, Structured Notes, this unique hybrid investment combines growth potential with investment protection to offer you greater returns with minimal risks.

The first element in a Structured Product is a bond, which makes up most of the investment (typically 80%). The rest of your money is put into an Option – a financial instrument that's linked to the value of either a stock market index or the price of another asset, such as gold. It’s the bond that aims to provides capital protection, to ensure you get your original capital investment back partially or fully, depending on your personalized note, provided they are held until maturity and subject to credit risk of the issuer.

At Citigold, we offer both Non-principal and Principal Protected Structured Notes. A Principal Protected Structured Note offers guaranteed returns that are equivalent to your initial investment. On the other hand, a Non-Principal Protected Structured Product offers potentially higher returns on your investment but carries higher risks.

New Structured Products are launched regularly, offering a wide and diverse choice from low/medium risk capital protected structures to very high risk structures where there is potential for high returns on investment but also significant losses. So, they suit many investors and your Relationship Manager can advise which would best suit your investor profile and fit with your wealth management strategy.

Why would you consider Structured Products?

Structured Products are innovative and flexible investment products that will be suitable for you if you:

  • want to diversify your portfolio with structured products that protect your principal and still offer the opportunity to realize higher rewards than a standard Time Deposit
  • want the opportunity to invest in high-risk securities you wouldn't consider direct investment into, such as equities or commodities.
  • can lock away your money for the term of the particular Structured Product (generally one to five  years).
  • can meet the minimum investment criteria to invest in a Structured Product.
  • are prepared to accept that you may only receive the initial amount invested, if the  option element of the Structured Product does not perform.

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Benefits and risks

  • The bond element of the Structured Product provides partial or full capital protection, to get your capital investment back.
  • The option component gives you the potential for higher returns than you would get from a standard deposit.
  • By combining two products, the bond element mitigates the risk that the option component presents.
  • Structured Products are complex investment products and are subject to investment risks which include principal protection. This is provided they are held until maturity and is subject to issuer risk. This means you accept the risk that if the issuer fails and are unable to pay the investment back, you could lose your entire investment.
  • Past performance is not indicative of future results. Structured investments can go down as well as up. This means you might get back less than you invested.
  • Our Partners

    Citi's Structured Products options

    Citi gives you access to the leading providers of Structured Notes to give you more choice and to allow you to benefit from the experience of the world's top financial companies. Amongst our partners are:

     

    • Credit Suisse
    • BNP Paribas
    • Citigroup Global Markets Holding Inc. and Citigroup Global Markets Funding Luxembourg S.C.A.
    • Deutsche Bank
    • JP Morgan
    • UBS
  • Currencies

    You can take out a Structured Note in Euros, US dollars, Pounds (GBP) as well a range of other currencies.

  • Tailored

    For example, you could choose a five year 100% principal protected Structured Note linked to the FTSE 100 index, in GBP. At maturity, you receive 100% of the principal investment, and the potential to get higher returns subject to the favourable movement in the price of the FTS 100 index over the five-year term.

    Another option could be a three year Non Principal Protected Structured Note from in USD linked to two stocks. You receive a coupon quarterly of 2.5% (10% p.a.), if both the stocks are above 60% of the initial levels (i.e., if neither of the stocks fall by more than 40% on the quarterly valuation dates). If on the maturity date, after 3 years, both the stocks are above 100% of the initial level, you receive your principal back along with the coupon for the quarter. If any of the two stocks are between 60% and 100% of the initial level, you will receive your principal back. In case either of the stocks is below 60% of the initial level, your principal may be eroded and you could receive physical delivery of the worst performing stock.

    In addition to the wide range of Structured Notes we offer, we can put together an individual Structured Product based on your particular needs, combined with our experts' opinions of future growth sectors. Tailored Notes are available for investments of minimum £1 million.  

    Minimum investment terms apply. Please speak to your Relationship Manager for full details.

  • Onshore & Offshore

    Citi can help you diversify your wealth on a global scale and take advantage of both onshore and offshore structured investments, giving you access to an even wider range of markets and products. We help make international wealth management easy for you by opening up investment opportunities in a way that is clear and straightforward.

    Depending on your individual circumstances, investments held offshore may bring certain tax advantages which can be useful if you are an expatriate living and working in the UK. 
    Please note Citi does not provide tax advice. We recommend that investors who have queries on tax issues seek professional advice from a tax adviser. 

Citiview: our research-based approach

Citi View is our research-based approach to choosing which Structured Products we make available to you. Each month we add a new selection to our Structured Product offering in order to meet our clients’ wide range of investment needs and goals. For example, we offer Structured Products that are:

  • Both principal and non-principal protected. Non-Principal Protected Structured Products could offer potentially higher returns but are associated with higher risks. Please note that principal protected is not the same as principal guaranteed, as a guarantee must be provided by a third party guarantor, such as a government entity or an insurance company.
  • Comprised of a zero-coupon bond and an option on an underlying asset. The zero-coupon bond provides you with the protection at maturity while the option gives you an opportunity to participate in any movement in the value of that underlying asset.
  • Available in a wide range of currencies. A single Structured Product may also be issued in more than one currency. However the amount collected in each currency must equal or exceed the minimum tradable amount. (In special circumstances, the amount collected in two currencies may be combined to meet the minimum lot size requirements).
  • Invested for anything between one to five years.
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Managing your Structured Products at Citi

A dedicated Relationship Manager is there to: 

  • Identify suitability of Structured Products based on your individual risk profile
  • Advise on how to meet your financial goals
  • At your request review your Structured Product options and performance
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Please note that Structured Products cannot be bought via Citi Online.

Eligibility

The minimum investment amount is generally EUR 100,000. However, we have a few Structured Products every month that are sold on a private placement basis and these have lower entry levels of 50,000 in the denominated currency, i.e. GBP 50,000, EUR 50,000, USD 50,000.

Please note that not all products and services are available in all jurisdictions.

Fees

There is a 3.5% fee which includes a 2% transaction fee and a 1.5% advice fee.

Important information about Structured Products

Structured Notes are not suitable for everyone. Investors assume full credit risk of the Issuer and/or the Guarantor. This means that should the Issuer and/or the Guarantor become insolvent or fail in any other way you may not receive back any of your investment monies, not even the initial investment amount as the principal protection will not apply in this situation.

Payment of principal, interest or any other amounts due under or pursuant to notes are not protected by the UK Financial Services Compensation Scheme Limited or the Irish Deposit Guarantee Scheme (the "Scheme") in the event of the issuer being unable to meet any of their obligations under or pursuant to the notes. Investors assume the full credit risk of the issuer defaulting on their obligations.

Notes are not designed to be liquid and investors should intend to hold their Notes until maturity. Notes may have no established trading market or a trading market that is not very liquid. Therefore investors should be aware that they may not be able to sell their Notes easily or at prices that would provide them with a comparable yield to similar investments that have a developed secondary market.

Why Wealth Manage at Citi?

  • As part of a model portfolio Receive guidance to meet your financial goals

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  • Speak to a dedicated Relationship Manager Seek advice and buy individual funds

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  • Easy access to your wealth Invest at your convenience through our online platform

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  • From an international selection Choose funds from 34 global markets

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  • As offshore investments Diversify your wealth on a global scale

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Important information
Investment products are not insured by any governmental agencies, are not bank deposits, and are neither obligations of, nor guaranteed by, Citigroup, or any of its affiliates, unless otherwise stated.


Investment products are subject to investment risks, including possible loss of some or all of the principal amount invested. Past performance is not indicative of future results, investments can go down as well as up.

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