DBS Vitamin Account

The Vitamin account is a structured product. An investor invested $40,000 in October 2005. On the maturity date in October 2011 (5 years), the investor will receive the full principal plus the performance of the underlying references (which amounts to NIL). During the 5 years, the investor obtained a total payout of 4.1099% or about 0.8% per year. This is a poor yield for an investment that is locked up for 5 years. It is a structured equity-linked product.

Many investors had invested in structured products, such as the Vitamin account, for 5 years and received a paltry return. It is advisable for investors to avoid all types of structured products, including the capital guaranteed, capital protected, equity-linked, currency-linked or credit-linked products. The experience of nearly all the products issued by the banks over the past ten years had been disappointing.