Growth, Income & Principal Protection Structured Notes

A structured note is a powerful portfolio tool that can provide flexible return and protection options. An investor can target a level of expected returns over a defined time period with structured notes.

A few potential benefits of including in a diversified portfolio are capital protection, yield enhancement and upside participation – providing a middle ground between bonds and stocks. Most all structured notes have four basic components:

  1. Underlying – normally an index, stock, or basket of stocks that the note’s performance tracks
  2. Return/payoff – the percent return an investor receives over the term of a note
  3. Protection – the amount an investor is protected from price declines in the underlying asset
  4. Maturity/term – the time period over which the note is held, anywhere between 6 months and 20 years

There are three main types of structured notes depending on investment objectives:

  • GROWTH NOTES – usually structured to participate in the upside returns of the underlying assets, with a level of downside protection included
  • INCOME NOTES – these notes have defined coupon payments that an investor receives, contingent on the performance of the underlying asset
  • PRINCIPAL PROTECTION NOTES (PPNs) – primarily focused on capital protection with a level of expected returns when held to maturity

Book some time below, or reach out to your RetireOne Regional Director to get started with this powerful portfolio diversification solution offered from Halo Investing.

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