Market-Linked Investments (MLIs) offer investors the opportunity to earn potentially better returns than fixed deposit. 100% of investors capital is protected if held to maturity. MLIs' most attractive feature is that it can be customized to suit the investors' needs and requirements.
Chart 1: Benefits of MLIs
Benefits of MLIs
Allow investors to stagger their investment duration, thus allowing better cash flow management.
Potentially better returns than fixed deposit. 100% capital protection if held to maturity
Offers potential reward and risk control that may protect against inflation
How Does MLIs Work?
MLIs fall in between traditional low-risk-low-returns and higher-risk-potentially-higher-returns investments.
MLIs have safety features of fixed deposits such as full capital protection or sometimes with fixed interest return, if held to maturity. However, it also offers some upsides of investments in terms of potentially better-than-fixed deposits return.
Chart 2: Where do MLIs fall within?
MLIs comprise fixed income and derivatives portion.
Fixed income provides capital protection, if held to maturity and a minimum fixed interest, if any.
Derivatives would provide the potential enhanced return (also known as 'performance payoff').
Key Risks
Chart 3: Components of MLIs fall within?
Credit risk; Legal risk; Market/underperformance risk; Liquidity risk; Operational risk; Early termination risk (Early termination by Investor) and Commitment risk; Options risk; Currency risk; Mismatch risk; Counter-party risk; Potential return risk; Sovereign risk; Possible conflicts of interest risk; Early termination by Citibank; Event risk; Leverage risk; Re-investment risk
WARNING:
THIS IS A STRUCTURED PRODUCT. THIS INVESTMENT IS LINKED TO THE PERFORMANCE
OF ONE OR MORE MARKET PRICES, RATES, INDICES, SECURITIES AND OTHER FINANCIAL
INSTRUMENTS THAT INTRODUCE SIGNIFICANT RISK THAT WILL AFFECT THE PERFORMANCE
OF THIS INVESTMENT.
Disclaimer
A Market Linked Investment is a structured investment.
Structured investments are subject to investment risks and the potential
returns may vary, depending on the performance of the designated underlying
financial instrument or asset. You may sustain a loss on your principal amount
invested if you terminate your Market Linked Investment prior to maturity.
Investors investing in Market Linked Investment denominated in non-local
currency should be aware of the risk of exchange rate fluctuations that may
cause a loss of principal. You may experience a loss when you convert any
foreign currency into the home currency. Foreign exchange controls may apply
to foreign currencies. Market Linked Investment is an investment product that
should be held to maturity. Early withdrawal of the whole of the Market Linked
Investment is strongly discouraged. If the Market Linked Investment is pre-terminated
by you, you will have to pay early termination costs and these will be deducted
from the amount repaid under the Market Linked Investment, hence resulting in a
loss of your principal amount. Prior to entering into a transaction you should
consult with your own legal, regulatory, tax, financial and accounting advisors
to the extent you consider it necessary, and make your own investment, hedging and
trading decisions (including decisions regarding the suitability of this transaction)
based upon your own judgment and advice from those advisers you consider necessary.
In the event that you choose not to seek advice from a financial adviser, you
should carefully consider whether this product is suitable for you in light of
your investment objectives, financial means and risk profile. This product is
not available to U.S. persons and may not be available in all jurisdictions
