What Are Structured Notes?
Structured Notes are hybrid investment products issued by banks that combine traditional bond features with equity market exposure. These notes can be customized to fit your risk tolerance, time horizon, and income needs.
Key Features:
✅ Equity or index-linked returns with the opportunity for enhanced returns
✅ Built-in downside protection (via buffers or barriers)
✅ Defined maturity dates
✅ Potential to generate income with yields often exceeding traditional bonds.
Participation Multipliers, Capture More Upside:
Structured notes allow you to participate in equity market growth—often with enhanced upside features like participation multipliers above 100%. Performance is linked to the S&P 500, Nasdaq, or international indexes, these notes can offer:
✅ Participation multipliers up to 250%
✅ Performance linked to broad market or sector specific indices
✅ Defined matury dates
✅ Tax Efficiency
Protect Your Principal in Volatile Markets:
One of the biggest advantages of structured notes is the ability to limit your downside risk—a smart strategy for uncertain markets or pre-retirement investors. These protections help reduce portfolio drawdowns, especially during market corrections—without exiting the market completely. Common protection features include:
✅ Buffers that offer downside protection against the first 10% to 30% loss.
✅ Barriers that prevent loss unless a threshold is breached ranging from 20% to 40%
✅ Principal protection of 100% by the issuing bank or 100% FDIC insured
Generate Income with Structured Notes:
Some structured notes are designed to produce significant cash flow when the market stagnates or dips. It is ideal for tax efficient diversified investors. Unlike traditional fixed income, structured notes can combine income with equity market exposure, offering a better return profile in today’s interest rate environment. Income notes can offer:
✅ Monthly, quarterly, or annual coupon payments
✅ Contingent income tied to index or stock performance
✅ Yields often exceeding traditional bonds or dividend stocks
Recently Issued Structured Notes
Growth Note: International Equities
5-Year Growth Note: Earn 2.45 times the return of the weaker performer between SX5E (Euro Stoxx 50) and EFA (Developed Markets ETF) over five years. If both indexes are positive, the enhanced return applies to the lower-performing one. If either index is negative, there is 30% contingent protection at maturity. If the weaker index falls more than 30%, your investment will be reduced by the same percentage. Maximum loss is 100% if the weaker index drops to zero.
Learn MoreSPX: Enhance returns with income or participation multiplier
5-Year Callable Note: Callable after year one. If SPX is positive after the first year, the note is called early, returning principal plus a 10.75% interest payment. If not called, after five years the note pays 1.5 times the positive performance of SPX. If SPX performance is negative after five years, the note provides contingent protection up to a 30% loss; beyond a 30% drop, losses match SPX performance, with a maximum potential loss of 100%, if SPX drops to zero.
Learn MoreHedge Your Portfolio: Earn Interest when the market dips
3-Year Structured Note: Pays a monthly coupon of 10.99% per year as long as the worst-performing index (NDX, RTY, or XLE) stays between 70% and 100% of its original price. After six months, if all three indexes are above their initial levels on a monthly observation date, the note is called early, returning full principal plus final coupon. At maturity, if the note hasn't been called and the worst-performing index is at or above 60% of its starting level, investors receive their full principal. If below 60%, investors receive only the proportional remaining amount, with a maximum loss of 100% if the worst-performing index drops to zero.
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