Growth potential even in falling markets

17 September 2026

Most portfolios have one gear.

They are built to capture market growth, and they do that well when markets rise. The problem is what happens when they do not.

Over a working life of accumulation, that is rarely a problem. There is time on the client's side. But stretch the same portfolio across a 30-to-40-year retirement, and flat or falling markets stop being an occasional inconvenience. They become a regular feature of the journey.

Flat markets are easy to overlook

Falling markets get attention. They are visible, they are dramatic, and advisers know how to talk clients through them.

Flat markets get far less attention, but they can still do damage. If a client is drawing income and the market goes nowhere for two or three years, the portfolio is not growing to offset the withdrawals. Capital simply erodes, quietly, without ever triggering the kind of conversation a 20% fall would.

A portfolio that only really works when markets rise is, in practice, a portfolio that only really works some of the time.

Reframing the problem

The instinct is often to ask how to protect the portfolio from a fall. That is part of the picture, but it is not the whole one.

The better question is whether growth itself needs to be conditional on the market cooperating at all. If a client's plan only produces a positive outcome when markets rise, the plan is more fragile than it looks on paper, however well diversified the underlying assets are.

Where structured products fit

This is where defensive and step-down structured products earn their place.

They are built specifically to produce a positive return in market conditions where a conventional portfolio would be flat or losing ground. A step-down plan, for example, can still pay a positive return even if the underlying index is below its starting level at a given observation date, provided it stays above the required level.

That does not mean the client stops being exposed to markets. It means the range of market outcomes that can still produce a positive result for the client widens considerably. Rising markets, flat markets, and moderately falling markets can all potentially contribute to the plan working, rather than only the first of the three.

An easy addition, not a rebuild

None of this requires unwinding what is already in place.

Structured products sit alongside the client's existing investment portfolio. They are not a replacement for it, and the existing portfolio continues to do what it does well: providing long-term, diversified market exposure.

In practice, we see many advisers allocate somewhere between 10% and 30% of a client's total invested assets to a purposefully selected blend of structured products, chosen specifically to target the outcomes the client needs. They can typically be held within most standard investment wrappers, and a number of plans are usually used together, with different underlyings, observation dates and counterparties, to complement the wider portfolio.

It is a genuinely straightforward change to make, and one that can meaningfully widen the conditions under which a client's plan can still succeed.

If you'd like to discuss how structured products could complement your current investment and retirement proposition, I'd welcome the conversation. Please get in touch on 020 3100 8157 or [email protected].

Joe Simpson
Director, Investment Management


Structured products are capital-at-risk investments and are not suitable for every client. Past performance is not a reliable indicator of future results. This article is for professional advisers only and does not constitute advice.

The value of any investment can go down as well as up, and you may get back less than you invest. Walker Crips Investment Management Limited is authorised and regulated by the Financial Conduct Authority (FRN: 226344).