ST Income Notes Diversified Portfolio XV
Annualized yield3
Term
9 months
Closed
Recently funded
Accepting $15,000 - $500,000 investments
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Accepting $15,000 - $500,000 investments
Overview
Opportunity to target quarterly income payments while mitigating volatility of stocks
- Attractive income: Seeks to generate quarterly income at a rate above inflation and traditional fixed income.
- Principal protection: The portfolio’s built-in downside protections means that the valuation of the underlying stocks can fall by a certain percentage before an income payment is missed or principal repayment is impacted.
- Diversified portfolio: Each portfolio includes three different income notes tied to three different stocks, allowing investors to diversify their risk.
- Diligent investment approach: Income structured notes are purchased based on a transparent process that requires each underlying stock to meet certain criteria, which is expected to minimize the likelihood of any significant price decline.
Premise
Investment details
Investment details
What am I investing in?
- A structured note is a debt security issued by major financial institutions. Its returns are linked to the performance of an underlying stock. Structured notes can be income and/or growth focused. Yieldstreet primarily only offers portfolios of income structured notes.
- ST Income Notes Diversified Portfolio XV will initially invest in 3 individual income structured notes, each referencing different underlying stocks; Halliburton Company (HAL), Target Corporation (TGT) and Alphabet Inc. (GOOG).
- Each income structured note has varying characteristics, including yield (coupon), downside protection barrier and strike price.
- Each portfolio includes three income notes, meaning even if one income note misses their quarterly coupon, the other two still have the potential to pay their coupons that quarter. This structure helps mitigate risks of each underlying income note.
- Additionally, the issuing bank also reserves the right to call a structured note ahead of maturity. Should a note be called on the first observation date following the conclusion of the call protection period, called proceeds may reinvested in a new 160 day note such that the maturity of the portfolio does not exceed 9 months. If a note is called following the first observation period, called proceeds will be distributed back to investors as they are received.
Investment strategy
Investment strategy
What is the value proposition?
- The portfolio is designed to help shield investors from market downturns and seeks to generate a quarterly coupon payment that is outpacing inflation.
- The underlying stocks would need to fall below their downside protection barrier before a quarterly coupon payment is missed or principal repayment is impacted.
- For example, consider an investor invests in a stock of company A and an income structured note tied to the performance of the underlying stock A.
- The income structured note pays a 10% coupon with a 30% downside protection barrier, and a 12 month maturity.
- If the price of the stock A decreases by 5% at maturity, the returns of the income structured note (assuming the value of the underlying stock remained above the downside protection barrier for the whole period) tied to the performance of stock A would be 10% (coupon), while the returns of the actual stock would be -5%.
- In this scenario, if the portfolio consisted of 50% stock and 50% income structured notes, the investor would make a 5% profit overall (hypothetical example used for illustrative purposes only).
- See the Series Note Supplement which illustrates the outcome if the underlying stock of the structured note falls below the downside protection barrier at maturity.
Behind the investment
Behind the investment
What is Yieldstreet's experience in the space?
- To date, Yieldstreet has offered 66 structured notes portfolios, with over $168M allocated.
- Themes are chosen based on current market conditions, and have included consumer, energy, financials, diversified, and defensive, among others.
- Yieldstreet has parameters in place to ensure income structured notes meet certain standards at a minimum, including:
- At least 25% downside protection
- Quarterly coupons 9-month term
- Annualized coupon >5%
- Historical breach of downside protection barrier <15%
- Each stock will have at least a 90% confidence interval of not breaching the downside protection barrier
- Notes chosen will be diversified by issuer and sub-industry group
Market backdrop
Market backdrop
Why should you consider investing?
- With inflation running at ~8% this portfolio can be attractive to investors looking to generate income that is outpacing inflation.
- With a 9-month term, this short-term investment can help aid investor liquidity needs.
- The CBOE Volatility Index, or VIX, has been on the rise in recent months, and investors may benefit from built-in downside protection to help protect their capital in the event that stock valuations continue to fall.
Income structured notes are purchased based on a transparent process that requires each underlying stock to meet certain criteria, which is expected to minimize the likelihood of any significant price decline. This includes:
- Underlying stocks must be Member of S&P 500
- Market cap >$10B
- Positive net income for current year
- Forward P/E ratio less than the sector’s average or PEG (price to earnings growth) <1 or annual revenue growth >20%
- Bloomberg analyst median target share price > current stock price
- Short interest <5%
- Moderate recent volatility
- Relative strength index <70
Essentials
Please refer the Series Note Supplement in the Resources section for more details about this offering
Please refer the Series Note Supplement in the Resources section for more details about this offering
Capital structure
Capital structure
Where does Yieldstreet lie in terms of priority?
- The Portfolio is expected to own the all three income notes entirely. The Portfolio does not expect to employ any leverage.
Cash flow
Cash flow
How do I get paid?
- Short Term Income Notes Diversified Portfolio XV will initially invest in 3 individual income notes, each referencing a different underlying stock. The portfolio is expected to generate a target net annualized yield paid quarterly.
- Each income note will have varying characteristics, including yield (coupon), downside protection barrier and strike price.
- As such, performance for the portfolio will be calculated on a weighted basis of the performance of each structured note. Each structured note is expected to have a term of 250 days.
Accessibility
Accessibility
What can invest?
- Eligible investors must certify that they are Accredited Investors.
- YS IRA accounts are eligible to invest in this offering.
Returns & Management fees
Ann'l management fee
1.50%
Target ann'l net yield
Login to viewMultiple on invested capital
9.09
Schedule
Payment schedule
Quarterly
Term
9 months
Structure
Tax document
1099-INT
Offering structure
Short term note
Ann'l flat expense
0.25%
Why people invest in Structured Notes
Krushil P.
Krushil P.
Investor since 2018
"Great protection level and coupon rate when these companies have already come down pretty significantly year to date."
George C.
George C.
Investor since 2017
"1099 tax form and diversified mix of underlying equities."
Patrick C.
Patrick C.
Investor since 2021
"In these uncertain times, I like the downside protection as well as the upside potential."
*The testimonials presented on this page have been provided by actual investors in Yieldstreet funds without compensation. Yieldstreet has selected the testimonials, and certain testimonials have been edited to remove personally identifiable information and for brevity. Testimonials were not selected based on objective or random criteria, but rather were selected based on Yieldstreet's understanding of its relationship with the providers of the testimonials. The uncompensated testimonials presented here may not be representative of other investors' experiences, and there can be no guarantee that investors will experience future performance or success consistent with the testimonials presented.*
Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.
Docs
Content
This offering page describes only certain aspects of the offering ("Offering") of the securities issued by YS ST Structured Notes LLC ("Issuer"). The Offering is made only by means of the Private Placement Memorandum dated August 17, 2022 and the Series Note Supplement relating to the Offering (collectively, the "Offering Documents"). The information on this offering page is a summary of the Offering, does not purport to be complete and should not be considered a part of the Offering Documents, or as incorporated in the Offering Documents by reference or as forming the basis of the Offering. No person has been authorized to give any information or to make any representations other than those contained in the Offering Documents or in any marketing or sales literature issued by the Issuer or Yieldstreet Management, LLC, as adviser thereto, and referred to in the Offering Documents, and, if given or made, such information or representations must not be relied upon. All investors must read the Offering Documents in their entirety prior to investing in the securities. Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.
Investing in private markets and alternatives, such as this offering, is speculative and involves a risk of loss, and those investors who cannot afford to lose their entire investment should not invest. Returns are not guaranteed.
2 Represents an average net realized internal rate of return (IRR) with respect to all matured investments in your portfolio, utilizing the effective dates and amounts to and from the investments and net of management fees and all other expenses charged to the investments. Past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. All securities involve risk and may result in significant losses, including the loss of principal invested.[read more]