Menu
The Principal Protected Indexed Linked Yield Strategy is an innovative investment approach designed to provide investors with the best of both worlds: downside protection and upside potential. This strategy links your investment performance to the S&P 500 Total Return index while ensuring that your initial capital is fully protected.
Our primary goal is to offer you peace of mind with 100% downside protection of your initial invested capital, while allowing you to fully participate in the upside potential of the S&P 500 Total Return index, subject to the applicable participation rate.
Schedule a meeting with a Confluent advisor today and learn about the best options to fit your needs and start taking advantage of your hard earned money without putting your initial investment at risk!
Your initial investment is 100% protected, ensuring you won’t lose your principal even in a market downturn.
Enjoy full participation in the S&P 500 Total Return index gains, based on the applicable participation rate.
Tailor the strategy to your specific needs with flexible terms and index selection options.
Access a product typically reserved for institutional investors, now available in a managed account structure for private wealth clients.
We create our principal protection strategies by using stock based option strategies. This means the upside returns on the investment match possible market returns on par with the underlying metric such as the S&P 500 Index. Meanwhile, the lowest possible return is 0%. So no matter what happens, your principal stays protected!
Sarah and Bill, a retired couple with $250,000 in savings, chose Confluent’s Principal Protected Strategy to preserve their principal while participating in the equity market. With 100% downside protection, they’re assured their savings won’t decrease, even if the S&P 500 Index drops.
Scenario 1:
High S&P 500 Index returns
In a stronger market, if the S&P 500 Index goes up by 30%, in 1 year, they earn 13.85%, growing their account to $284,619.
Scenario 2:
Moderate S&P 500 Index returns
If the S&P 500 Index rises by 10% in 1 year, they earn 4.76% in interest, bringing their account to $261,909.
Scenario 3:
Negative S&P 500 Index returns
If the S&P 500 Index loses 20% in 1 year, they earn 0.0%, keeping their account at $250,000.
Conclusion:
Sarah and Bill have protected their $250,000 in savings while leaving their earning potential open to outperform most other typical options such as a CD or high yield savings account. This strategy gives them peace of mind with potential for growth, all while keeping their principal safe.
This strategy is particularly well-suited for investors looking to put cash to work or those seeking downside protection while maintaining upside potential. It offers a unique opportunity to engage with the market while mitigating risk.
Over the one year term, your investment will:
1. Be protected from any downside in the S&P 500 Total Return index.
2. Participate in the upside of the index, subject to the participation rate.
3. Provide a return of your initial investment at minimum, regardless of market conditions.
S&P 500 Index returns in one year | Interest credited to account |
|---|---|
0.0% or less | 0.0% |
5.0% | 2.49% |
10.0% | 4.76% |
15.0% | 7.03% |
20.0% | 9.31% |
25.0% | 11.58% |
30.0% | 13.85% |
35.0% | 16.12% |
To read all relevant disclosure info and risk considerations, click below:
The information provided above is for illustration purposes only and does not constitute investment advice or a recommendation. Each client has unique financial needs, objectives, and circumstances; therefore, results will differ for each individual. The data presented is as of October 1st, 2024, and the investment horizon for this strategy is 1 year, with the options expiration date being September 30th, 2025.
The strategy involves the use of options and fixed-income securities, with the Money Market yield being 4.5% and the one-year STRIPS priced at 96.2% as of October 1st, 2024. All returns and credits described in the case study are based on the completion of the full investment term. Early termination or liquidation of the strategy may result in unexpected outcomes, including a potential negative return or partial loss of the principal.
The underlying index used for this strategy is SPDR® S&P 500® ETF (SPY) to represent S&P 500 Index returns. However, the results of this strategy may vary due to the rounding of shares and contracts for trading purposes.
It is important to note that investment in this strategy does not guarantee specific returns, and past performance is not indicative of future results. Any discrepancies in returns may arise from rounding errors or other factors.
Confluent Asset Management is not responsible for any decisions made based on the information provided in this illustration, and no liability is assumed for any actions taken by clients based on this example. Please consult with a professional financial advisor to determine the suitability of this strategy for your specific financial situation.
All returns are shown after deducting fees. This illustration assumes an annual fee of 1%.
CONTACT US
© 2024 Confluent All Rights Reserved.
