Fixed Coupon Note: High Returns And Low Risk

Equities are perceived to be more volatile than fixed income investments, making them uncomfortable for risk-averse investors. Global interest rates have been declining, leading to lower nominal returns. Fixed Coupon Notes (FCNs) are quasi-equity and quasi-bond structures that provide higher returns than bonds with lower risks, making them an attractive option for investors. This book aims to provide the basics and nuances of investing in FCNs to help investors understand the product and avoid common pitfalls.

\n Format: Hardback
\n Length: 172 pages
\n Publication date: 02 December 2020
\n Publisher: World Scientific Publishing Co Pte Ltd
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Equities are often considered to be more volatile than fixed income investments, which can be daunting for risk-averse investors who struggle with the daily fluctuations in stock prices. Additionally, some investors believe that equities are currently overpriced, making them hesitant to take on equity positions at their current valuations. On the other hand, global interest rates have been declining since the 1970s, when inflation was finally under control by central banks. This decline in interest rates means that investors are facing lower nominal returns, which can be a concern.

Since the Global Financial Crisis of 2008, many investors have felt left out of the equity markets, seeking alternative investments that offer higher returns with lower risks. Fixed Coupon Notes (FCNs) are a type of structured product that combines elements of equity and bond investments, aiming to provide higher returns than bonds while maintaining lower risks compared to equities.

One of the key advantages of FCNs is that they offer an avenue to enter the equity markets at reasonable prices and acceptable valuations. Since FCNs are the most popular structured product in Asia, there is a wealth of institutional experience and knowledge about the product. This book aims to provide a comprehensive guide to investing in FCNs, covering both the basics and the nuances of the product.

In the first chapter, we will explore the concept of FCNs and how they work. We will discuss the different types of FCNs available, including plain vanilla FCNs, floating rate FCNs, and inverse floating rate FCNs. We will also examine the risks and benefits of investing in FCNs and how they compare to other investment options.

In the second chapter, we will delve into the valuation of FCNs. We will discuss the factors that affect the value of FCNs, including interest rates, credit risk, and market risk. We will also explore the different valuation methodologies used to determine the fair value of FCNs and how investors can use these methodologies to make informed investment decisions.

In the third chapter, we will examine the investment process for FCNs. We will discuss the steps involved in investing in FCNs, including selecting the right FCN, determining the appropriate investment amount, and managing your portfolio. We will also explore the different strategies that investors can use to maximize the returns of their FCN investments.

In the fourth chapter, we will discuss the risks and challenges associated with investing in FCNs. We will examine the factors that can impact the performance of FCNs, including interest rate fluctuations, credit risk, and market risk. We will also explore the different risk management strategies that investors can use to mitigate these risks and protect their investments.

In the fifth chapter, we will explore the potential benefits of investing in FCNs. We will discuss the historical performance of FCNs and how they have performed compared to other investment options. We will also examine the potential for long-term growth and the benefits of investing in FCNs over the long term.

In the final chapter, we will provide a summary of the key points covered in the book. We will also offer some concluding thoughts and recommendations for investors who are interested in investing in FCNs.

In conclusion, Fixed Coupon Notes (FCNs) are a unique investment product that offers the potential for higher returns with lower risks compared to equities. By understanding the basics and nuances of FCNs, investors can make informed investment decisions and maximize the potential benefits of this innovative investment strategy.

\n Weight: 396g\n
Dimension: 159 x 236 x 17 (mm)\n
ISBN-13: 9789811225031\n \n