Mutual funds: Where fun came to die

The industry is better than ever--but also duller

John Rekenthaler 13 November, 2019 | 1:09AM

Cave

Structured notes
The perpetually perceptive Matt Levine recently had this to say about structured notes (structured notes being a security created by attaching derivative contracts to a bond).

“The [underlying value of the structured note] will be, like $97. The bank will sell you the note for $100. The bank makes $3. It’s a pretty good business for the bank. What are you doing, though? The answer can’t be ‘buying $97 for $100.’ The structured note tells a story, and you are buying that story.”

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John Rekenthaler

John Rekenthaler  John Rekenthaler is Vice President of Research for Morningstar.

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