Fixed Income has traditionally been viewed as an asset class that provides principal preservation and periodic income.
However, the tradeoff of owning this asset class is that return objectives are often not being met. For investors that depend upon income and these return objectives being met, this can be a major issue. Market Linked Income Notes can be a solution and offer the following:
Suitable for conservative investors
Can provide consistent monthly or quarterly income
Provides the potential to earn higher income than traditional fixed income securities
Why Consider Income Notes
Unattractive bond yields
Dismal outlook for traditional fixed income returns
Potential for enhanced, periodic income
Interested in an investment with a shorter time frame than traditional fixed income securities
Watch our Whiteboard video describing how these unique investments work.
How It works
Contingent Coupon Payments
Coupon payments are made for the length of the note as long as the performance of the underlying reference asset is at or above the defined Coupon Barrier Level on the specified Coupon Observation Date
Payment at Maturity
The investor will receive their initial principal investment amount if the performance of the underlying reference asset is at or above the predetermined Principal Barrier Level. However, if the performance falls below the Principal Barrier Level, the investor is exposed to the full decline of the reference asset versus the Initial Level.
The issuer can call the note before its scheduled maturity date. The investor will receive their initial principal investment plus any accrued, unpaid coupon amount.
The issued note will typically mature within 3 years.
How to Invest
Our team at Claro Advisors is experienced in the structured note market and can be resource for investors looking for advice and access. Click here if you would like a member of our team to reach out to you.