Which type of investment fund is considered illiquid and unsuitable for partial encashment?

• A. Unit-linked bonds
• B. Unit-linked savings plans
• C. Structured retail products
• D. Managed funds

Answer: (C)

Structured retail products are designed with complex features often linked to various underlying assets, such as equities or commodities. These products typically have specific maturity periods and may implement conditions that affect the ability to withdraw or encash funds before maturity. As a result, they are generally illiquid, making it difficult for investors to access their capital before the product reaches its maturity.

Investors in structured retail products usually commit their money for a fixed term, during which the funds may not be readily available or encashable in part without potential penalties or loss of value. This lack of liquidity and restrictions on partial encashment make these investments unsuitable for individuals who may need flexible access to their investment capital.