This refers to long-term options and customized indices, for example, to buy a very popular S&P Economic Cycle Factor Rotator Index, it is necessary to directly interact with a large foreign investment bank which has the exclusive right to design products with this underlying asset.
There are more products with capital protection available to the investor now such as investment bonds and structural deposits, which are no longer the premium category and offered to everyone, exchange-traded structural bonds - these are all compatibles of ILI issued by Russian brokers, management companies and banks.
The ILI itself is also being modernized, the article authors believe. Insurers began to offer policies with partially guaranteed returns not so long ago. An investor, by having bought such a product for five years with a guaranteed yield of 2.5%, will receive at least 112.5% of the invested funds upon the expiration of the contract term.
Besides, both insurers and other financial companies will be engaged in more accurate preparation of the client’s risk profile and give customized tips on portfolio optimization, which will be possible through the Data mining use. Soon, the financial companies will analyze not so much the answers as the actions of the investor, for example, how he manages funds in a brokerage account. If the algorithm sees that a person closes positions even with a small correction, it will propose to increase the share of conservative fixed-income instruments in the portfolio.
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