The Problem With Structured Notes

Over the past decade, structured investment products, also known as equity- or index-linked notes, have become increasingly common in the portfolios of retail investors. In 2013 alone, more than $40 billion in structured notes were issued.

And this is not just a U.S. phenomenon. A 2009 study by Marc Rieger and Thorsten Hens found that in some countries (Germany and Switzerland, for example) approximately 6 percent of all financial assets are held in structured products.

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