Example: A Market-Linked Income Alternative
Jan 27, 2026
Below is an example of a market-linked income note we purchased for clients seeking higher income than traditional fixed-income options such as CDs, Treasuries, or corporate bonds—without taking full equity market risk.
Investment Overview
Bank Issuer: UBS
Trade Date: January 15, 2026
Tenor: 24 months
Underlying Indices:
Nasdaq-100 Tech Index
S&P 500 Index
Russell 2000 Index
Structure: Worst-of performance, measured by price appreciation/depreciation
Income Feature
The note pays 12% annualized contingent income, delivered through monthly coupon payments.
Monthly income is paid as long as none of the three indices has declined more than 30% from its initial level on an observation date.
If any index is down more than 30%, income payments are temporarily suspended.
Payments resume automatically if the affected index recovers above the 30% threshold on a future observation date.
Principal at Risk
Principal is returned at maturity unless the worst-performing index is down more than 30% at maturity.
If an index is down more than 30% at maturity, the investor participates 1-for-1 in the decline beyond that point.
Example: If the index is down 35% at maturity, the investor incurs a 35% loss of principal.
Investors are also exposed to issuer credit risk. If UBS were to default on its senior unsecured debt, investors could lose some or all of their investment regardless of index performance.
Investors should review the prospectus and related offering documents for a complete discussion of risks, terms, and conditions before investing.
Historical Context
Using Bloomberg data from February 22, 2006 through December 31, 2025, and assuming a 24 - month note maturity, similar historical scenarios resulted in positive outcomes approximately 94.5% of the time.
Past performance does not guarantee future results, but this data helps illustrate how often comparable market conditions stayed within the defined thresholds.