A capital guarantee product means that when an
investor
An investor is a person who allocates financial capital with the expectation of a future return (profit) or to gain an advantage (interest). Through this allocated capital most of the time the investor purchases some species of property. Type ...
buys, or "enters", this specific
structured product
A structured product, also known as a market-linked investment, is a pre-packaged structured finance investment strategy based on a single security, a basket of securities, options, indices, commodities, debt issuance or foreign currencies, and ...
he is guaranteed to get back at
maturity a part or the totality of the money he invested on day one. Examples of capital guarantees include
bond plus option, usually bond plus call, and
constant proportion portfolio insurance
Constant proportion portfolio investment (CPPI) is a trading strategy that allows an investor to maintain an exposure to the upside potential of a risky asset while
providing a capital guarantee against downside risk. The outcome of the CPPI stra ...
.
Derivatives (finance)
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