Structured Operations Certificates (COES) in 2010 in Brazil, especially after 2016, when, when, They began to attract more attention in the financial market. These investments combine fixed income and variable income aspects, offering the investor a variety of their portfolio with the same product. But how do they really work and make this option interesting? Next, see how COES works, their advantages and disadvantages.
What is Kos?
COEs are hybrid financial tools that unite fixed income and variable income. Specifically, they are the Brazilian version of the United States and Europe widely popular structured notes. The proposal of this type of investment is to combine security and risk strategically, allowing the investor to be actively exposed to different markets and actions, objects or coins.
With this decor, the COES investor allows the investor to obtain a wide range of assets without fully exposing the same investment, balanced risk and returns.
How Kos works
COEs are structured based on the combination of fixed income and variable income assets, creating a variety of market scenes. The investor chooses in a variety of COEs, including guaranteed capital or partial protection.
Types of Kos
COE of guaranteed capital: This type of COE provides the overall protection of the value of investment. Regardless of the performance of the variable component of the investment, the investor reciess the initial value at the end of the deadline. Although there is no profit for variable income assets, it will ensure that the capital is lost.
Stress with partial protection: In this model, some part of the capital is guaranteed, but the rest are subject to the losses of the market. In spite of partial protection, the investor should know that some of the amount applied through fluctuations in financial assets can affect.
The selection between the guaranteed or partial protection COE depends on the risk profile and the investor’s goals.
Investment structure
Each COE has a certain structure, “thesis” (exploring property or indicator) and the procedure for this property market. From scratch for the investor, what are the possible scenes of profit and loss, which allows a more accurate and transparent investment plan.
This well -defined structure provides more control in volatile markets what to expect from investor to invest in investor.
The advantages and disadvantages of coes
Benefits:
COEs offer many benefits, including portfolio diversification, attractive returns and capital protection. In addition, transparency on profit and loss scenes makes the product more accessible and understandable.
Disadvantages:
One of the main disadvantages of COES is its complexity, which makes it difficult to understand early investors. The lack of contact with the construction of these products is an obstacle for those who are inexperienced in the financial market.
Despite the advantages, COEs need deep knowledge about risk and return mechanisms, especially those who have started investing in.
How to invest in Kos
It is necessary to select a financial institution that provides this type of product to invest in COES and check if the investment is entered in CETIP, which ensures safety and transparency. In addition, it is essential to understand the construction of the COE, the assets involved and the risks associated with any application.
It is important to understand the structure and possible scenes to take advantage of the benefits of COES and reduce the risks.
COES has emerged as an interesting alternative to those who want to diverse their investment options, risks and potential gains in the constantly changing economic market. However, as in any other investment, it is essential to understand its details before committing itself.
