The biggest investment market that no one has ever heard of can be found in structured notes, according to Jason Barsema, co-founder of Halo Investing.

Previously reserved for ultra-high-net-worth clients, structured notes are now available to retail investors, Barsema said in an interview. The product provides an insurance policy for the investor, and can be used to differentiate a practice for the advisor.

Structured notes are created by major banks and contain a bond component and a derivative component that limit both losses and gains. The bond portion of the note takes up most of the investment and provides principal protection in down markets. The assets not allocated to the bond are  used to purchase a derivative product that provides some upside potential.

Halo Investing works with 30 large banks around the world to make the notes available to investors, Barsema said.

The market for structured notes has grown and Barsema believes the market is set to expand dramatically as people learn more about the notes. Worldwide, the market is now $3 trillion, with $100 billion sold in the U.S. alone, he said. The market in the U.S. has doubled since 2016, Barsema said.

“Our job is to educate people to the potential in these products,” Barsema said. “The advisor can use access to these products as a way to differentiate his or her practice. The platform itself aims to bring advisors more personalization and better risk management to client portfolios.”

The notes required a high minimum investment in the past because they were time consuming to create, but Halo Investing has streamlined that process, Barsema said. In the past minimum investments ranged around $1 million; now, with simplified processing, the minimum for Halo Investing is $1,000, he said.

The market now also provides daily liquidity, although most investors hold the product for the long term, he added.

“Most people have stocks and bonds and nothing in between,” he said. “We can offer that alternative” when the 60/40 portfolio may no longer be cutting it. “In the era of higher interest rates and market uncertainty, protective investments can reduce risk in a portfolio, increase returns and help generate income in the portfolio.”

More than half of Halo Investing’s clients have never bought a structured note before being introduced to them, he added.

“The message still has a long way to go – we are in the very early stages of this market, but we are getting the message out as to why investors need protection against the downside of a volatile market.”

Barsema and Biju Kulathakal founded Halo Investing in 2015 and launched their first products two years later. Headquartered in Chicago, the firm has offices in Zurich and Abu Dhabi. Halo Investing provides investments that include structured notes that feature downside protection.

Barsema said he and his partner saw a need and opportunity to democratize protective investing and make it more easily accessible for advisors and their clients. Halo markets its products to RIAs and broker-dealers.