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Capital-protected note linked to an equity index
A bank-issued note that aims to return the invested amount at maturity, plus a share of any rise in an equity index.
- Risk level
- Moderate
- Horizon
- 2 to 5 years
- Currency
- BRL or USD
- Income
- At maturity
Illustrative only. Not an offer, solicitation or recommendation. Details, availability and eligibility depend on the issuing bank and your jurisdiction.
The idea
The issuing bank combines a bond-like component, which aims to return the principal at maturity, with an option that pays a share ("participation") of an equity index's rise over the term.
How it pays
- At maturity: the principal, plus the agreed participation in the index's gain, if any.
- No regular coupons in this version. Other versions trade some upside for periodic coupons.
Main risks
- Issuer credit risk: the protection is only as strong as the bank that issues the note.
- Liquidity risk: selling before maturity may be possible only at a discount, or not at all.
- Opportunity cost: if the index falls or stays flat, the return may be zero, below what a plain bond would have paid.
- Complexity: read the term sheet for caps, averaging and early-redemption features.
Who it may suit
Investors who want equity exposure with protection of capital at maturity and who can hold the note to the end.
What we are building
Members will see each note's payoff diagram, a scenario table for different index outcomes, and the issuer's official documents.