Should I add structured notes to my portfolio?
By Adam Kasick | Wealth Advisor | Updated September 2026
Structured notes can make sense as part of a diversified portfolio when their specific payoff structure aligns with what you want that money to accomplish. I typically want to understand four things first: what return you're trying to achieve, how much downside you're willing to accept, when you'll need the money and what alternatives we're comparing the note against.
Here's how I'd think about it.
A structured note shouldn't earn a place in your portfolio because the headline rate looks attractive. It should earn its place because the structure solves a specific problem better than the alternatives you're considering.
What could change the answer?
- Your time horizon and liquidity needs.
- The index or asset the note is linked to.
- Whether protection is a buffer, barrier or another structure.
- Caps, call features and conditions attached to income.
- The creditworthiness of the issuer.
- What you would own instead.
What I'd avoid
Buying a note because the coupon looks exciting without understanding how principal can be lost, when the note can be called, what happens at maturity and who is obligated to pay you.
Here's what I'd want to know about you.
- What do you want this money to accomplish?
- When might you need it?
- How much downside are you willing to accept?
- What does the rest of your portfolio look like?
- What alternatives are we comparing this note against?
If you're interested in adding structured notes to your portfolio, this is an area I can help you evaluate and implement.
Talk With Me About Structured Notes →