No, the Confluent Principal Protection Strategy is not an annuity. Whereas annuity products are an insurance underwritten by issuing institutions, this strategy does not depend on any such insurance. The options in the strategy are guaranteed for settlement with the Options Clearing Corporation (OCC), further adding to the openness and reliability of the strategy.
This strategy is ideal for investors who value customization, transparency, and downside protection while seeking equity market growth. Potential investors include:High-net-worth individuals, pre-retirees and retirees, risk-averse investors, small businesses, independent advisors, institutional clients. By tailoring investment parameters, this strategy can cater to a broad range of financial goals.
No, there's no assurance that you won't lose anything. The approach is not supported by the financial assurances of a bank or insurance firm, despite its goal of offering downside protection. Nonetheless, the OCC guarantees the settlement of options used in the approach. In the unusual event that the OCC becomes insolvent or is unable to fulfill its commitments, any loss could result. The OCC's classification as a Systemically Important Financial Market Utility guarantees more stringent regulation to reduce these risks.
1. Reference Asset Exposure: The asset, such as S&P 500, which the strategy is tracking against for performance.2. Cap: The maximum return the strategy can realize during the outcome period, excluding fees. Example: A strategy tracking the S&P 500 with a cap of 10% does not include returns above 10%.3. Buffer (Downside Protection): The amount of protection the strategy provides against losses, pre-fees, over the outcome period.4. Outcome Period: The period over which the strategy will provide its predefined outcomes, whether it be a cap on returns or protection against losses
The performance of the strategy depends on the movement of the reference asset and is achieved by the interaction of options and the underlying. The following scenarios are possible returns: At any point during the Outcome Period: 1. If the reference asset increases, the value of the strategy will increase, but it typically will not rise as much as the asset because of the cost of the downside protection. 2. If the reference asset declines, the downside protection will temper your losses.At Maturity:1. If the reference asset declines below the protection level (buffer), the losses are limited to the buffer.2. If the return of the reference asset is within the buffer and cap, the strategy tracks the return of the reference asset.3. If the return of the reference asset exceeds the cap, the return of the strategy is limited to the predetermined cap level.
