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How to Take More Control Over Risks and Returns
Incorporating structured products can help construct a portfolio designed to better withstand market uncertainties.
Structured products: a quick review
Structured products are hybrid financial instruments created by pairing a fixed income instrument with an over-the-counter (OTC) derivative that can express a view on any asset class – equity, fixed income, commodity or currency.
Breaking down the structured product
The derivative piece allows the purchaser to adjust the underlying asset’s risk and reward profile – the underlying asset’s performance largely determines the note’s value.
The instruments can encompass mass market offerings or can be highly customizable.
Structured products may act as a way to create more defined payouts for a portion of an investor’s portfolio.
Investors can consider shifting a portion of existing equity or fixed income exposure to structured products, building out a hybrid allocation in their overall portfolios.
Why consider structured products?
While it’s common to think of structured products as tactical tools only useful during market drawdowns or amid elevated volatility, they can do more because they’re highly customizable, with a range of risk-return profiles suitable for various investing goals and market environments.
Historical data shows that structured products can provide outcomes with reduced volatility – returns are tied to the performance of the underlying security but can be designed to give up some upside in exchange for limiting downside.
Structured products can be an attractive opportunity in an uncertain environment. Our analysis found a fixed income structured product’s asymmetric risk-return is historically in line with a traditional balanced portfolio, with a modest increase in risk.
Risks to consider
The underlying asset’s value performance can fluctuate, impacting the value of the note.
Products are issued by a bank, so the structured product’s reliability depends on that issuer’s creditworthiness.
Structured products are traded over the counter and do not encompass a liquid resale market (so selling them quickly without a loss would be difficult).
Structured products may not be suitable for everyone. If you prefer to trade in and out of investments frequently, or if you’re uncomfortable with complexity, these instruments may not be the right fit.
Rick Barragan is the Managing Director,
Los Angeles Market Manager, for
J.P. Morgan Private Bank.
r.barragan@jpmorgan.com | (310) 860-3658
privatebank.jpmorgan.com/los-angeles
Source: “How to take more control over risks and returns” Benjamin Eng, Cross Asset Structured Products Specialist, Nov. 18, 2025
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