INVESTING IN MARKET LINKED NOTES
Market Linked Notes are investment products that provide stock like returns in up-markets, with capital protection in downmarkets. They are hybrid stock/note instruments that have a fixed holding period. They are generally issued by major banks.
The return from the notes are based upon the performance of a well-known Market Index such as the S&P 500.
The payment at maturity is a percentage of the market return over the holding period of the note. If the market index return
is negative over the holding period, the note can guarantee full principal return or provide limited downside protection.
Typical features of Market Linked Notes are
Market linked notes are suitable for
So is there a Free lunch? – yes, if you can wait
The Veda Financial process and why it works
Veda Financial is unique in the way that we actively look for these offerings for clients, as market conditions change
Examples of Market Linked Notes
These are actual notes which were issued previously. Current offerings might not offer the same features
Guaranteed note with 125% of
market return, and 0% downside
Equity Index-Linked Certificates of Deposit Due 2027: This was a 7.5 year note issued by a major bank such as Goldman Sachs with at least 125% upside market participation in the S&P 500 index, and guaranteed return of capital. It provides a return upon maturity at least 25% higher than the market return on that date, with full downside protection. It provides opportunity for capital protection as well as stock market participation.
You should not invest in these products without reading the full investment brochure
Market Linked Note with 150% of market return,
with 30% downside protection
5Yr IN DU/RTY Trigger Return Enhanced Note: This is a Morgan Stanley issued 5 year note with 150% upside participation in the INDU Dow Jones Industrial Index & Russel 2000 index. There is a downside protection of 30% ( ie full return of initial capital down to markets -30% from Issuance)