DEFINING STRUCTURED INVESTMENTS
Structured investments are financial instruments that enable investors to pursue a specific objective or express a market view. They combine a debt security, such as a bond or a certificate of deposit, with one or more derivative instruments linked to an underlier, or reference asset, such as an index, ETF, or stock. Structured investments are primarily used to manage risk or increase income or return potential in a portfolio.
CHOOSING AN INVESTMENT
The power of structured investments is in the flexibility of their design, offering solutions across the risk- return spectrum. With an objective in mind, an investment can be shaped to meet specific investor needs.
PAYMENT TYPE
Structured investments enable investors to participate in the potential growth of an underlying index or asset. Market-linked growth products typically offer a single payment at maturity, while market-linked income products offer potential periodic coupons.
PROTECTION
Structured investments may offer full protection of principal, or partial protection in exchange for higher potential returns.
TERM
Structured investments have investment terms starting at six months, but generally range from one to five years. Terms can be fixed or callable, with the possibility of early redemption.
UNDERLIER
Structured investment returns are linked to the performance of a reference asset, allowing investors to gain exposure to a specific index, sector, or asset class, while mitigating downside risk.
HYPOTHETICAL STRUCTURED INVESTMENT TRADE
Objective: An investor seeks the potential growth and diversification that may come with international equity exposure. She is optimistic about emerging markets specifically and comfortable with equity risk. However, she would appreciate some downside protection should those markets experience a slight to moderate decline.
Potential Solution: A four-year market-linked growth note with 20% barrier protection and 1.5x upside participation tied to the MSCI EM Index.
The visuals included are hypothetical examples. They do not reflect any specific structured investment, and are solely intended to help illustrate how different payment and protection methods work.
BENEFITS
KEY RISK CONSIDERATIONS
Key risk considerations may include, but are not limited to, the following:
Structured investment products and services may be offered through SIMON Markets LLC (“SIMON”). SIMON is a registered broker/dealer, member FINRA and SIPC, and is affiliated with iCapital, Inc. and its subsidiaries. Please see the disclaimer at the end of this document for more information about these entities.
Please contact your financial professional or wealth management platform to learn more.
IMPORTANT INFORMATION
STRUCTURED INVESTMENTS ARE CONSIDERED COMPLEX PRODUCTS AND MAY NOT BE SUITABLE FOR ALL INVESTORS.
This material is intended as general background information, for educational purposes only, and this material should not be used as a primary basis to make an investment decision. The material provides a general overview of the products described, and actual financial instruments may differ materially from those described. No person should consider investing in an instrument on the basis of these materials. Any investment decision should be made only after carefully reviewing the applicable prospectus. Please remember that all instruments described in this material involve a risk of loss. This does not constitute legal, accounting or tax advice, and the recipient should consult with his or her legal, accounting or tax adviser regarding the instruments described in this material.
This material is for informational purposes only and is not to be construed as a recommendation or an offer or solicitation to buy or sell any security, financial product or instrument, or otherwise to participate in any particular trading strategy. In providing information on hypothetical, generic structured investments, SIMON Markets LLC is not recommending a specific security, nor does it recommend investing a certain percentage of a portfolio to one structured investment. Before investing in any product, an investor should review the prospectus or other offering documents, which contain important information, including the product’s investment objectives or goals, its strategies for achieving those goals, the principal risks of investing in the product, the product’s fees and expenses, and its past performance.
Please note that there is no public secondary market for structured investments. Although the issuer may from time to time make a market in certain structured investments, the issuer does not have any obligation to do so and market making may be discontinued at any time. Accordingly, an investor must be prepared to hold such investments until maturity. Any or all payments are subject to the creditworthiness of the issuer. SIMON Markets LLC operates a platform that makes available offerings of structured investments and annuities to financial professionals. In operating this technology platform, SIMON Markets LLC earns revenue based on the volume of transactions that take place in these products and would benefit by an increase in sales for these products.
This material may not, without SIMON’s prior written consent, be (i) copied, photocopied, or duplicated in any form, by any means, or (ii) distributed to any person that is not an employee, officer, director, or authorized agent of the recipient. SIMON shall have no liability, contingent or otherwise, to the user or to third parties, for the quality, accuracy, timeliness, continued availability, or completeness or to update any data contained in this material nor for any special, indirect, incidental or consequential damages which may be incurred or experienced because of the use of the data made available herein, even if SIMON has been advised of the possibility of such damages. This material was not prepared with a view to public disclosure or to conform with any disclosure standards under any state, federal or international securities laws or other laws, rules or regulations, and SIMON Markets LLC does not take any responsibility for the use of the information in this material.
Structured investment products and services may be offered through SIMON Markets LLC and/or Axio Financial LLC, each a registered broker/dealer, member FINRA and SIPC, andsubsidiary of iCapital, Inc. (“iCapital). iCapital affiliates include Institutional Capital Network, Inc., iCapital Securities, LLC and iCapital Advisors, LLC. iCapital Securities, LLC, a registered broker/dealer, member FINRA and SIPC, offers alternative investment products and services. iCapital Advisors, LLC is an investment adviser registered with the SEC. The referenced registrations and memberships in no way imply that the SEC, FINRA or SIPC have endorsed the entities, products or services discussed herein. iCapital and iCapital Network are registered trademarks of Institutional Capital Network, Inc. Additional information is available upon request.
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