Advanced Investment Holdings Ltd is a structured product promoted by Investec that offers diversified international equity exposure, plus capital protection. This could be a smart option when markets appear to be expensive.

Despite the lows and blows of the global news headlines, major world stock indices and commodities have been setting and surpassing new records in 2025. The rolling records and milestone numbers, however, can be a conundrum for new entrants and buyers.

With huge swathes of the investment landscape feeling relatively expensive, finding the right entry point can prove tricky. Structured products with capital protection and degrees of outcome predictability could strike the right balance.

Riding the waves

In October, gold traded above $4000/ounce for the first time, finding $4,300 mid-month before retreating, and the FTSE 100 traded in record territory, surpassing successive “all-time highs”. Stateside, the S&P has weathered tariff-induced dives (April) and poor labour data (July and August) and still came out swinging in September and October, showing weekly gains in four of five consecutive weeks and taking 2025’s tally of record high days to 37 so far.

As CNN breathlessly reported (in September), the S&P 500 “soared nearly 30% since its low point in April”, trading at 3.25 times sales on August 12, making for the highest level ever for that metric. The Buffett Indicator, CNN pointed out, was at 217%, “a historically high level that signals the stock market might be strongly overvalued”. It has since clocked in at 225%. Exact numbers aside – as the records stack up – the article provides a rundown of potential “overvaluation” signals, cautioning against not just the relative expense of the market but also increased sensitivity to shifts in sentiment.

Faced with this kind of market, some investors will be questioning how to proceed: Sitting it out means missed time in the market, while buying “too high” can mean a bracing bump at the bottom end of a trough.

The safety of structure

Structured product offerings provide for buyers seeking exposure to the high potential returns of the international equity market, without the downside equity risk, thanks to built-in capital protection. Plus, a range of other benefits as below.

Advanced Investment Holdings Ltd (AIHL) is an example of a structured product offering. AIHL is in the form of a listed, Guernsey-incorporated company that has Investec as its investment adviser. Investors subscribe for shares in the company, fully externalising the investment in USD. With the funds raised from the issue of shares, the company buys financial instruments that create a structured product payoff profile for investors. The financial instruments are issued by large international banks, which means that South Africans can further diversify their SA risk.

In this case, an investment in AIHL provides exposure to the growth of a broad-based basket of equity indices[1]. AIHL will return the growth of the index basket multiplied by a participation rate of 125%[2]. The index basket growth is capped at 40% – for a maximum return of 50% in USD (i.e., 40% x 125%). The term of the investment is five years and one month, with the potential to exit the investment early under normal market conditions.

Strategies for risk management

With 100% capital protection[3] at maturity in USD, this offering reduces the downside risk of future equity market shocks. Instead of traditional equity market risk, it provides a more predictable outcome between a “floor and ceiling”.

AIHL achieves capital protection through purchasing a debt instrument, which will accrue interest over time until it matures at 100% of the company’s capital. The debt instrument is a credit-linked note where the issuer and credit reference entities are large international banks with investment-grade credit ratings. The payout from the debt instrument at maturity is used to return the company’s capital, regardless of the movements of the equity market. However, the company’s capital is at risk if there is a default or credit event, in which case the full value of the debt instrument will not be paid out at maturity.

While risk cannot be avoided, this offering allows investors to reduce downside equity risk by taking on additional credit risk, which can be perceived as less risky.

A portfolio view

This offering is positioned to provide diversified global equity exposure within a portfolio, of particular interest for investors with mid-range horizons taking a buy-and-hold approach rather than one of, say, attempting to time the markets. Furthermore, as a dollar-denominated instrument, South Africans who anticipate rand depreciation on the horizon could see potential further upside should they convert their USD investment back into rands.

For more information, visit our website. Applications close on 28 November 2025 with a minimum investment amount of USD 12,000.

You can also refer to the recent podcast with The Finance Ghost and Japie Lubbe of Investec Structured Products, available below and with the full transcript here.

Please ensure that you do your own research and speak to your financial advisor. This sponsored article (and the related podcast) should not be seen as an endorsement or investment recommendation by The Finance Ghost, but rather a tool to assist in your research process.

[1] S&P 500 (35% weighting), Euro Stoxx 50 (35% weighting), Nikkei 225 (20% weighting), FTSE 100 (10% weighting)

[2] The participation is dependent on market conditions on trade date (the current participation is 125%). Advanced Investment Holdings Ltd reserves the right to trade a minimum participation of 115% if required due to market conditions on trade date.

[3] Structured products provide capital protection through the assumption of credit risk. They are intended for sophisticated investors who understand this risk and are willing to take it. There is credit risk on the debt issuer, each reference entity (the credit risk relates to the subordinated debt issued by such reference entities), and the equity investment provider(s). A default by any such party(ies) may cause the value of such investment of the company to be reduced or to become zero, which may adversely affect the share price or cause the share to become worthless.

Disclaimer available here.