A complex world

The European structured products market has hit a rough patch. Despite record-setting inflows – Merrill Lynch says e37 billion of equity-linked product was sold in the second half of 2002 – many of these investments are not meeting investor expectations.

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Products tied to declining equity markets have, of course, suffered, but fewinvestors can complain about that – if they understood the risks involved.Others, such as Banca Monte dei Paschi di Siena’s 4 You deal, were structuredin a way that made it highly unlikely they would ever do well. As investor groupshave come to realise this, they’ve pressed the distributors for refunds.Sophisticated regulators such as Italy’s Consob are taking a closer lookat the market overall (viewarticle).

Investin

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