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ST Income Notes Diversified Portfolio XII

Annualized yield3

Term3

9 months

Per the amended marketing rules adopted by the SEC, some investment details can only be shown to certain logged-in members.
Status

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.

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Premise

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 XII will initially invest in 3 individual income structured notes, each referencing different underlying stocks; Capital One Financial Corp (COF), FedEx Corporation (FDX) and Salesforce Inc (CRM).
  • 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.

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

What is Yieldstreet's experience in the space?

  • To date, Yieldstreet has offered 63 structured notes portfolios, with over $151M funded.
  • 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

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

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

How do I get paid?

  • Short Term Income Notes Diversified Portfolio XII 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 of 12.33%.
  • 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

What can invest?

  • Eligible investors must certify that they are Accredited Investors.
  • This offering is not available to pension plans, defined benefit plans, defined contribution plans, retirement plans, IRAs, 401(k) and 403(b) funds, and funds comprised of these plans and funds.

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  • Returns & Management fees

    Ann'l management fee

    1.50%

    Target ann'l net yield

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    Multiple on invested capital

    1.09%

  • 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.

Investor since 2018

"Great protection level and coupon rate when these companies have already come down pretty significantly year to date."

George C.

Investor since 2017

"1099 tax form and diversified mix of underlying equities."

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.

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 May 31, 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.