A Market-Linked Income Alternative
Jan 14, 2026
By Patrick McNamara Copy
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.
By Patrick McNamara Copy
CFP®, Financial Advisor at Claro Advisors
About the Author
Patrick McNamara, CFP® is a Financial Advisor at Claro Advisors
with nearly 30 years of experiencein the financial services industry.
He has held senior roles at Fidelity Investments, Goldman Sachs, and
Morgan Stanley. He founded StructuredNotes.com to educate investors
on institutional-style investment strategies and structured notes.
Disclosure: Claro Advisors Inc. (“Claro”) is a Registered Investment Advisor with the U.S. Securities and Exchange Commision (“SEC”) based in the Commonwealth of Massachusetts. Registration of an Investment Advisor does not imply a specific level of skill or training. Information contained herein is for educational purposes only and is not considered to be investment advice. Claro provides individualized advice only after obtaining all necessary background information from a client.
The investment products discussed herein are considered complex investment products. Such products contain unique features, risks, terms, conditions, fees, charges, and expenses specific to each product. The overall performance of the product is dependent on the performance of an underlying or linked derivative financial instrument, formula, or strategy. Return of principal is not guaranteed and is subject to the credit risk of the issuer. Investments in complex products are subject to the risks of the underlying reference asset classes to which the product may be linked, which include, but are not limited to, market risk, liquidity risk, call risk, income risk, reinvestment risk, as well as other risks associated with foreign, developing, or emerging markets, such as currency, political, and economic risks. Depending upon the particular complex product, participation in any underlying asset (“underlier”) is subject to certain caps and restrictions. Any investment product with leverage associated may work for or against the investor. Market-Linked Products are subject to the credit risk of the issuer. Investors who sell complex products or Market-Linked Products prior to maturity are subject to the risk of loss of principal, as there may not be an active secondary market. You should not purchase a complex investment product until you have read the specific offering documentation and understand the specific investment terms, features, risks, fees, charges, and expenses of such investment.
The information contained herein does not constitute an offer to sell or a solicitation of an offer to buy securities. Investment products described herein may not be offered for sale in any state or jurisdiction in which such offer, solicitation, or sale would be unlawful or prohibited by the specific offering documentation.
©2025 by Claro Advisors, Inc. All rights reserved.
For all Market-Linked Products, excluding Market-Linked CDs, the following applies: Not FDIC insured // Not bank guaranteed // May lose value // Not a bank deposit // Not insured by any government agency