Fixed Coupon Note

Equities are generally perceived to be more volatile than fixed income investments. Many risk averse investors are unable to digest the daily ups and downs in the prices of equities. They also feel that, from a historical perspective, equities are overpriced and thus are not comfortable taking equity positions at current valuations.On the other hand, global interest rates have been on a decline from the 1970s when inflation was finally under control by central banks. This decline in interest rates means that investors have to live with lower nominal returns. Since the Global Financial Crisis of 2008, many investors have been feeling left out of the equity markets.Fixed Coupon Notes (FCNs) are quasi-equity and quasi-bond structures which aim to provide higher returns than bonds with lower risks compared to equities. Moreover, they also provide an avenue to enter equities at reasonable prices and acceptable valuations. Being the most popular structured product in Asia, there is sufficient institutional experience about the product. This book aims to provide the basics as well as the nuances of investing in FCNs so that an investor not only understands the concepts behind the product, but is also able to avoid common pitfalls.Contents: What is Fixed Coupon Note (FCN)Option BasicsHow to Construct a Fixed Coupon Note (FCN)Performance Evaluation and RemediesOptions — A Deeper DivePerspective of the IssuerVariants of Fixed Coupon Notes (FCNs)Impact of Covid 19 turmoil on Fixed Coupon Notes (FCNs)
Readership: Investors interested in learning more about Fixed Coupon Notes. Wealth Managers and Bankers seeking more information about Fixed Coupon Notes. Investments;Wealth Management;Structured Products;Reverse Convertibles;Autocallables;Investors;Investment Bank;Equity;Fixed Income;Bonds;Index;Phoenix Note0Key Features:Most investors find the pain of losing their hard-earned wealth more painful than the joy of accretion. Given the daily variation in the prices of equities, and the possibility of losses, many investors are forced to stick to fixed income investing. As such, they find Fixed Coupon Notes (FCNs) to be a convenient solution, which is the most popular wealth management product in Asia. However, there is no book in the market which explains the features of FCNs. This book fills the gapYoung bankers, though conversant with the theory behind options, are learning about FCNs based on what is fed to them by their products teams. The education materials about the product prepared by the product teams are usually so concise that they leave out many aspects. Generally, the revenue earned by Wealth Managers from structured products is higher than the revenue earned form trading equities and bonds. As such, Wealth Managers have an incentive to educate their Relationship Managers about this product. This book will serve as a reference source for Wealth Managers