DWS Scudder is eyeing principal protection and leveraged structured notes as it readies a retail wholesaling effort that will begin early next year. The firm is also looking at building a mutual fund that invests in structured notes, as other fund firms have done.

Chris Warren, who joined as head of structured products from ABN AMRO in September, said he views structured notes as an "adjunct" to an investment portfolio, rather than a replacement for mutual funds. Warren said the notes can meet market demand more quickly than funds, which require a longer regulatory process before launching.

Warren said final decisions on exactly what notes would be debuted by the firm have yet to be made, but that he expected to roll out more than one equity-linked note, including possibly an income-oriented offering. Another possibility is a "buffer" or "air bag" note that is just partially principal-protected, he said.