With the introduction of long dated index options in the Indian markets, clients have the facility to structure products meeting their risk and reward needs.

Two examples of structured products are given below:

Two year index participation structure
This structure can provide capital protection and 80% - 100% of the upside potential of the equity market represented by NIFTY. This is structured using fixed income products and equity options. This is suitable for investors who would like to participate in the upside of equity markets but have no appetite for capital loss.

Reverse convertibles
Here the investor earns a high return from his fixed income investments. However if equity markets fall by a large amount (say 15%) his fixed income investments convert to equity investments at lower levels. This product is suitable for investors who feel that equity markets are moderately overvalued or are not very attractive at the moment. This class of investors would like to buy equities at a large discount to prevailing market levels. Here the investor gets a superior return compared to pure fixed income investments if the markets fall marginally or are stable or move upwards. If the markets fall by a large amount the investor is exposed to equities below the threshold level.

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