A structured note is a debt security issued by a bank that pays returns based on the performance of an underlying asset (usually a stock index). Most offer some combination of principal protection, capped upside, and buffered downside.
Structured notes are aggressively sold to retirees seeking "stock-like returns with bond-like safety." The reality is more complicated: fees are opaque, liquidity is poor, you're taking on the issuing bank's credit risk, and the payoffs are rarely as attractive as they look.
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