Jubilee Series Link Earner Notes

Hi Mr Tan,

Would like to seek your advice on the recently offered Jubilee Series 3 - LinkEarner Notes. Is it a Safe Investment?

A copy of the propectus is attached for your reference. I do not understand the clause "your investment will be secured with portfolio credit-linked notes, (synthetic collateralised debt obligations".

I am on the verge of my retirement. In 9 months times I will be reaching 55 yrs old. I will have some cash from my CPF.

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REPLY:

This is a structured product. I have not found any structured product that make sense to the investor. Please read my FAQ in www.tankinlian.com/faq.

I shall try to look at this product and give you my detailed comments later.

Tip: Never invest in a product that you do not understand.

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ANALYSIS BY LARRY HAVERKAMP

Credit linked notes look to be a good deal on the surface. The drawback is that if interest rates decline, the notes will rise and the company will call them -- (buy them back). Then you are left to invest your cash at a lower interest rate.

Second, most credit linked notes are not a unit trust or ILP -- and therefore do not disclose their expense ratio.

These are the two drawbacks -- (and they are big ones).