Market Linked Investments
We offer a variety of market linked investments, including market linked certificates of deposit and market linked notes.
Market linked investments generally offer no fixed coupon and instead provide an interest payment at maturity or at specified dates during their term, based on the performance of an underlying market measure.
Market measures may include, but are not limited to, equity indices such as the Standard & Poor's (S&P) 500® Index or Russell 2000® Index, a basket of equity indices/ETFs, a basket of commodities or a commodity index, or an interest rate curve.
These investment vehicles can:
- Help you gain exposure to a variety of asset classes while potentially limiting downside market risk if the market linked investments are held to maturity, subject to the credit risk of the issuer.
- Be used as an alternative to a direct investment in the underlying market measure, part of an overall asset allocation strategy, or as a portfolio risk-reduction tool.
Characteristics of Market Linked Investments
- Maturity: Typically between one and seven years
- Market measure: Linked to the performance of equities, commodities, or interest rates
- Minimum investment: Available in increments of $1,000, typically with a $1,000 minimum investment
Advantages of Market Linked Investments
- Return diversification: Interest exposure to a variety of asset classes, including domestic and international equities, commodities and interest rates
- Sophistication: Participation in investment opportunities that may otherwise be difficult to replicate as an individual investor
Risks & Considerations
- Performance risk: The return generated by market linked investments, if any, may be less than the return that could have been achieved by investing directly in the underlying market measure.
- Liquidity risk: Market linked investments are only appropriate for investors who do not have liquidity needs prior to maturity.
- Costs: The inclusion of placement fees and structuring and development costs in the issue price of market linked investments and certain hedging costs are likely to adversely affect the price at which you can sell your market linked products.
- Credit risk: Market linked investments are subject to the credit risk of the issuer.
Who Should Consider Investing in Market Linked Investments?
Market linked investments may not be suitable for some investors depending on their specific investment objectives and financial position. Please contact your Financial Advisor to learn if market linked investments are right for you.
Risks related to market linked investments will vary depending on the terms of such products. Prior to investing in any market linked investments, you should carefully review the related offering documents, including the discussion of risks that apply to such investments.
Contact Your Financial Advisors for More Information
If you would like to learn more about market linked investments, contact your Financial Advisor.