Weighted estimates are based on broker input – realization of such is subject to market conditions.
E&OE - Data as per June 30, 2019
The case for setting-up an Equity-Credit Linked Note
The equity-credit linked note (ECLN) is a combination of a credit instrument and an equity exposure. The ECLN allocation is highly objective-based, holding a few well-analyzed exposures; it is highly forward-looking, and involves only minimal rebalancing. As such, it recognizes the historical undervaluation of a company or a market. Investment decisions are built upon strong knowledge of key top-down factors. One of the shortcomings of this strategy is that the strategy may underperform the broader market for a substantial period of time; this is because investment returns on an ECLN may occur at an unknown time in the future.
Scope of investments
This strategy is opportune for investors seeking
In the past years, lowflation was highly supportive for markets. That occurred on the back of accommodative central bank policies. Unemployment levels and consumptions have now reached levels that have not been seen for years in many countries. Additionally, interest rates in the major economies are expected to rise during the next year, on the back of mildly higher inflation rates. With the overall growth outlook firming, consumer and business sentiments peaking, and corporate profits holding steady, we expect that achieving positive investment returns will be more difficult to achieve, and that alternative avenues will need to be explored.
