Risk Considerations

Risk Considerations

This section describes some of the risk considerations that should be evaluated with respect to structured investments. While we have attempted to compile a general overview, this should by no means be considered a complete list of all possible risks associated with the multitude of structured investments that are currently available in the marketplace.

Among the risks involved in owning structured notes and CDs, these four are often mentioned:

  • For non-principal protected notes, a major risk is potential loss of principal.
  • For principal protected notes and CDs, investors risk principal in the event they sell the notes prior to maturity (liquidity risk). There may not be a liquid secondary market for the notes or the value of the investment may be worth less than the principal amount prior to maturity.
  • In the case of a principal protected note or CD, the creditworthiness of an issuer must be considered.
  • There is a legal risk involved with holding complex instruments, where regulatory or tax considerations may change during the term of the investment.

Please note additional factors when determining risk/reward profiles of specific securities.

Full disclosure of the risk factors for each product is available from the relevant term sheets and prospectuses or offering documents. Investors should consult their Financial Advisor for investment advice and read all applicable offering documents before investing. Investors should carefully review the risk factors section in the relevant offering documents. Documents filed with the SEC are available on the SEC website at sec.gov. Any agent or dealer participating in the applicable product offering will also arrange to send investors these documents on request. Incapital makes no recommendations concerning any structured investment or the suitability thereof.
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