Alternative investment platform YieldStreet just announced a new offering that gives investors the opportunity to get low-risk exposure to price movement of three of some of the best-performing stocks in the S&P 500: Align Technology Inc. ALGN, United Rentals Inc. URI and D.R. Horton Inc. DHI.
The investment portfolio is made up of three structured notes that each follows one of the stocks above. With an investment ranging from $15,000 to $500,000, investors can be a part of a $1.5 million investment fund with an expected targeted annualized yield of 11% to 12%.
How do structured notes work?
A structured note is a debt security with returns linked to the performance of an underlying stock. If the performance of the underlying stock on the observation date is equal to or above its downside protection value, then the investor will receive their coupon for that period. If it is below, then the investor will not earn their coupon for that period.
At maturity (final observation date), if the underlying stock is at or above its downside protection value, then investors will receive their full principal back. If it is below its downside protection value at maturity, then the investor will receive less than their full principal back.
However, the amount of original principal will be reduced by the percentage decrease the underlying stock value fell relative to its strike price, highlighting the downside risk protection structured notes offer investors.
Investment Highlights: The investment portfolio targets structured notes that follow underlying stocks from the S&P 500 that have market caps of +$10 billion and very little short interest. This is accompanied by a 24-month initial maturity with an option to extend it another 12 months and a quarterly payout schedule.
Investors who want to safely diversify their portfolios with high-quality companies that have high probabilities of producing steady quarterly returns may find this offering attractive.
View offering details on Yieldstreet
Photo by Ruben Sukatendel on Unsplash
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