Structured Repackaged Asset-Backed Trust Security - STRATS


DEFINITION of 'Structured Repackaged Asset-Backed Trust Security - STRATS'

A derivative product similar to an exchange-traded fund (ETF) or American Depository Receipt (ADR), where the originator buys an asset, sets up a trust and then issues securities to investors. With structured repackaged asset backed trust securities the investors can benefit from the underlying asset's performance. Structured products are those that combine two or more financial instruments, including at least one derivative.

BREAKING DOWN 'Structured Repackaged Asset-Backed Trust Security - STRATS'

Repackaging allows an intermediary to make a profit by acquiring some of the financial assets of a financial institution and repackaging them in a manner that is more appealing to investors. A basket of assets can be placed in a trust which issues shared of equity interest to investors. For example, the STRATS Trust for The Allstate Corporation trades under the ticker symbol GJT and the STRATS for Walmart trades under the ticker symbol GJO.

  1. Exchange-Traded Fund (ETF)

    A security that tracks an index, a commodity or a basket of assets ...
  2. American Depositary Receipt - ADR

    A negotiable certificate issued by a U.S. bank representing a ...
  3. Asset-Backed Security - ABS

    A financial security backed by a loan, lease or receivables against ...
  4. Structured Investment Vehicle - ...

    A pool of investment assets that attempts to profit from credit ...
  5. Mortgage-Backed Security (MBS)

    A type of asset-backed security that is secured by a mortgage ...
  6. Maturity

    The period of time for which a financial instrument remains outstanding. ...
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