Risk management solutions with defined outcomes
Market-Linked Products are complex investments and may not be suitable for all investors, yet they offer defined outcomes and characteristics that may be attractive to you.
Are you…
- Worried about losing your principal?
- Concerned about volatility and equity market declines?
- Unsatisfied with the yield on most conservative investments?
What if...
You could receive some level of downside protection while capturing market growth or income opportunities?
Market-Linked Products, also known as Structured Products, aim to meet the needs of many of today’s investors in ways that traditional investments cannot. They can help control a portfolio’s exposure to market performance, rather than allow market performance to control the portfolio.
Three Types of Market-Linked Products
1-Market-Linked Certificates of Deposit
Similar to traditional CDs, Market-Linked CDs are issued by banks and offer full principal back at maturity.1 They also carry FDIC insurance up to applicable limits and an estate feature.1,2 Unlike traditional CDs, any potential gain and/or income generated is linked to the performance of one or more underlying assets.
2-Principal Protected Notes
Principal Protected Notes offer full principal back at maturity.1 Any potential gain and/or income generated is linked to the performance of one or more underlying assets. These senior unsecured debt instruments are issued by financial institutions and carry credit risk similar to corporate bonds.
3-Market-Linked Notes
Market-Linked Notes offer varying degrees of principal protection at maturity.1 Any potential gain and/or income generated is linked to the performance of one or more underlying assets. These senior unsecured debt instruments are issued by financial institutions and carry credit risk similar to corporate bonds.
Universal Capital Wealth Management provides Market Linked Products from world leading financial institutions
What types of accounts are eligible forMarket-Linked Products?
Single Accounts, Joint Accounts, Revocable trust accounts, Irrevocable Trust accounts, Corporation and Partnership accounts.
Individual Retirement Accounts (IRAs) including traditional IRAs, Roth IRAs, Simplified Employee Pension (SEP) IRAs, and Savings Incentive Match Plans for Employees (SIMPLE) IRAs Accounts.
To find out if Market-Linked Products are right for you
Click to schedule a 15-minute phone call with qualified financial professional with no obligation.
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What you should know before investingin Market-Linked Products…
Market-Linked Products are designed as buy-and-hold investments, and there may not be a liquid secondary market. The value of the investment may be worth less than the principal amount if sold prior to maturity. Any return of principal, interest and gains generated is subject to the credit risk of the issuer. Dividends paid on the underlier are not passed through to the Market-Linked Product.
- Call risk
Some Market-Linked Products (MLPs) are callable or redeemable, solely at the option of the issuer. The issuer is not obligated to redeem a callable note and will typically call a Note when it is most advantageous for them to do so. If the Note is called, it is possible that you may be unable to reinvest in a Note with similar or better terms. - Credit risk
For a Market-Linked CD, any investment above the FDIC allowable limit is subject to the credit risk of the issuer, as are any market-linked returns. A Market Linked Note or Principal Protected Notes represents a senior unsecured debt that is subject to the credit risk of the issuer. If the issuer goes into default, any return of principal, interest and gains generated could be at risk of loss. - Fees
Market-Linked Products are subject to fees and costs, including commission paid to your financial professional, structuring and development costs, and offering expenses. There are also trading costs, including costs to hedge the product. Any sales prior to maturity will be reduced by all associated fees and costs, which are detailed in the offering documents.
Liquidity risk
Market-Linked Products are intended to be held until maturity and there is no formal secondary market for the product, which makes early redemptions difficult and subject to a variety of market-related factors. If you are able to redeem Market-Linked Products prior to maturity, the redemption proceeds may be less than the amount you invested due to fluctuations in the underlying assets and other market-related factors.
- Performance risk
Market-Linked Products pay a return based upon the performance of an underlying asset as outlined in the offering documents. These terms could include interim caps, averaging, and rates of participation in the underlying asset. Market-Linked Products do not pay dividends. If dividends are declared on the underlying asset, they will be excluded when calculating the performance. There are a variety of factors that may influence the performance of the underlying assets such as volatility, interest rate moves, and time to maturity. Additionally, potential fees charged on the underlying asset may reduce or eliminate any positive return in that underlying asset, thereby reducing the return on the Market-Linked Products. - Tax implications
The tax treatment and timing of tax payments for a Market-Linked Product vary depending on the structure and type of account it resides in. For Market-Linked CDs and Principal Protected Notes in non-retirement accounts, you may be required to pay ordinary income tax on the Original Issue Discount (OID) amount calculated by the issuer each year, even if you do not receive interest payments during the life of the investment. Your brokerage firm or account custodian should provide the applicable 1099 forms for tax purposes. For specific terms, please refer to the offering documents or consult a tax professional. For additional information, please refer to the offering documents. - Volatility
Volatility refers to the amount of uncertainty or risk in a investment’s value, and the size of changes in that value. Higher volatility indicates that the price of the investment has the potential to change dramatically over a short period of time, in either direction. Volatility, the degree of positive and negative swings in the index, may increase or decrease. Uncertainty in the market can have a negative effect on statement values.
Disclosures
Universal Capital Wealth Management nor LPL Financial, and its affiliates explicitly disclaim any responsibility for product suitability or suitability determinations related to individual investors. This information should not be regarded by recipients as a substitute for the exercise of their own independent judgment, and the information provided herein is not an offer, solicitation or a recommendation to buy, sell, or hold any security or investment strategy. There can be no assurance that the investments shown herein were or will be profitable, and this material does not take into account any investor’s particular investment objectives, financial situation, particular needs, strategies, tax status, or time horizon.
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.
1. Any return of principal, as well as interest and gains generated are subject to the credit risk of the issuer and terms of the offering documents, which could include participation rates, interim caps, and various risks. Dividends paid on the underlying asset are not passed through to the Market-Linked Product. There is no guarantee that a Market-Linked Product will generate a positive return. Any applicable downside protection will be realized only at maturity, which may range up to 10 years. For certain Market-Linked Notes, return at maturity could be less than the original amount invested. Regarding Market-Linked CDs, the Federal Deposit Insurance Corporation (FDIC) insures principal amounts up to applicable limits in the event the issuer becomes insolvent.
2. Market-Linked CDs may have an estate feature that, upon death or adjudication of incompetency, allows beneficiaries to redeem Market-Linked CDs for at least their principal value, without interest, prior to maturity. Certain restrictions apply, and redemptions may be limited. Please refer to the investment’s offering documents for details.