Structured products are wending their way into portfolios, with investors recently sucking up half a billion dollars on just three new issues of the vehicles - three of some 67 offerings of structured products launched this year.

Some say that the growing appeal of structured products is due to their exotic features. They are packaged and issued by prospectus, and are considered general debt of an issuer such as Morgan Stanley or Merrill Lynch. Most are traded on the American Stock Exchange, with some paying interest. What they all have in common is a portion of the return being pegged to an equity or an index.

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