Structured Products: Questions and Answers

The term structured products covers a fairly broad range of different investment products. In this guide, moneyland.ch answers the most important questions and provides general information about structured products.

What are structured products?

Structured products – often abbreviated as “strukis” in Switzerland – are a broad category of investment products that combine an asset such as stocks or bonds with a derivative. Derivatives are financial contracts whose value is derived from the value of a separate, underlying asset.

These products can be tailored in numerous ways to create investment vehicles for many different risk profiles and market scenarios. There are structured products that enable you to earn returns even during periods of market stagnation or decline.

Which kinds of structured products are there?

Structured products can be roughly grouped into four sub-categories, based on risk-to-return ratios and market expectations.

Many structured products – but not all – have an expiry date on which the contract matures. On the expiry date, the structured product is terminated and you are paid out its value as per the terms of the contract.

How popular are structured products?

Structured products hold an important place in the Swiss investment landscape. According to the Swiss Structured Products Association (SSPA), the local industry association for structured products, Switzerland is the biggest market worldwide, with more than 200 billion Swiss francs being invested in structured products.

How much does using structured products to invest cost?

These products and their fees can be structured in many different ways, so a blanket statement about the size of fees is not possible. The costs vary between individual products. The total costs also depend on which bank or stockbroker you use to invest in structured products.

The ongoing fees charged by the structured product’s issuer are normally shown as the total expense ratio (TER). In many cases, the fees are higher than those you pay for passively managed investment funds like index funds and most exchange-traded funds (ETFs). Fees in excess of one percent per year are not uncommon. 

In addition to the fees charged by the product’s issuer, your stockbroker may also charge brokerage fees for buying and selling structured products on your behalf. Some stockbrokers charge higher fees for structured products than for stocks, bonds, or ETFs. Most stockbrokers also charge you ongoing custody fees to hold your assets. You can use the interactive stockbroker comparison on moneyland.ch to get an overview of the fees charged by different stockbrokers. You can select the “Derivatives and Structured Products” filter under “Specialized asset types” to limit results to stockbrokers that offer structured products trading.

What are the risks and disadvantages of using structured products?

The exact risks and disadvantages can vary broadly between individual products, making a general statement impossible. The risks depend on the terms and conditions of the contract, and on which underlying assets are used. But there are a few disadvantages that do apply to nearly all structured products:

• Complexity: many structured products have very complicated terms and conditions that are difficult for inexperienced investors to understand. As a general rule, finding a product difficult to understand should be seen as a warning signal. In that case, you should abstain from investing in that product because you are not in a position to correctly evaluate the risk of loss.
• No dividends: Structured products that use stocks as their underlying assets normally do not pass on shareholder dividends to you as the investor. In that way, using structured products to invest in the stock market is different from using ETFs or buying stocks directly.
• High ongoing costs: The ongoing fees charged for structured products can be relatively high, with annual fees sometimes exceeding one percent. That can have a negative impact on the final success of the investment.
• Counterparty risk: Unlike stocks, bonds, and ETF shares, structured products are not assets in themselves, but are simply debt claims against their issuer. That results in a counterparty risk for you as the investor. If the issuer were to go bankrupt, your structured product contracts could become worthless.
• High risk of loss: Many structured products come with a high risk of loss. That is particularly true for leveraged products that can potentially yield very high returns, but also incur very big losses.

Who can benefit from using structured products?

The term structured products does not denote a specific asset class, but is a title used to collectively describe a broad array of investment vehicles. Whether or not using these products makes sense depends on the specific product in question.

Having a clear understanding of the terms and conditions, as well as the potential risks, is always a clear requirement. Many structured products have complex features that can be difficult for inexperienced investors to fully grasp.

Often, structured products are tailored to very specific investment requirements and market expectations. Using them primarily makes sense if there is a special need that cannot otherwise be met. For example, leveraged ETFs are only available with a maximum leverage ratio of two to one, while leveraged certificates may have higher leverage ratios. But here too, it is important to note that using high leverage is not recommended for inexperienced investors because of the high risk of loss.

In many cases, there are other investment vehicles, such as ETFs, that can be used to invest in the same markets. For example, there are often equivalent index funds or ETFs that replicate the same stock indexes as tracker certificates. ETFs have less counterparty risk than tracker certificates because you own a share of the fund’s assets, as opposed to simply having a debt claim against the issuer.

How well do structured products perform?

There is no general answer to the question about how well structured products perform as an investment. For one thing, it is never possible to accurately predict how a market will perform in the future. Another issue is that the performance of a structured product primarily depends on the performance of its underlying assets, and prices of different kinds of assets can develop very differently.

The SSPA MBRC Global Index, which is published by the SSPA, can serve as a reference point. It tracks the performance of worst-of barrier reverse convertibles denominated in Swiss francs, euros, and US dollars. As per October 8, 2025, the index has gained around 6 percent since its introduction on July 31, 2024.

Disclaimer: This article is provided for informative purposes only, and should not be considered as investment advice. The publisher does not accept any liability in connection with this publication.

More on this topic:
Compare Swiss stockbrokers now
Asset classes that you can invest in with ETFs
How to invest with leveraged ETFs
How to profit when stock prices fall
How to invest money in Switzerland