Buffered Index Portfolio
This financial tool uses structured notes to create upward participation in the market with a predetermined level of downward protection against the volatility of it. You are offered the opportunity to enjoy the growth up to a prearranged return cap bit with a set level of buffer against any market loss.
The Structure Of A Cap And Buffer
The Buffered Index Portfolio seeks an attractive return potential with a partial downside protection. To see how they work, let’s plan a hypothetical scenario for a cap and buffer structured note and the results at different levels of the index return.
Scenario |
|
|---|---|
| Cap | 12% |
| Buffer | 10% |
| Participation | 100% |
| Outcome Period | 366 days |
Outcome Examples |
|
|---|---|
| Index Price Return | Cap/Buffer Return |
| -20% | -10% |
| -5% | 0% |
| -1% | 0% |
| 5% | 5% |
| 20% | 12% |