There’s BEN version that is callable by issuer?


Key Comments

• The Swiss National Bank cut its main interest rate by 25 basis points to 1.50% on Thursday, a surprise move which made it the first major central bank to dial back tighter monetary policy aimed at tackling inflation. The latest projections show the median policymaker expectation is for the Fed's benchmark overnight interest rate to fall three-quarters of a percentage point in 2025. JPM now looks at yield curve moving around other “mini” easing cycles, namely 1995 and 2019. On average, yields tend to decline more than 125bp in the six months prior to the first cut and we still see room for the curve to steepen from current levels.
   
• Generally, for every 1% change in interest rates, a bond's price will change approximately 1% in the opposite direction for every year of duration. If inflation trends downward in the coming months and Fed wants to be less restrictive, TLT investors could expect up to double-digit gains, depending on how far inflation falls. This is because inflation and interest rates are closely related and the longer the bond maturity, the greater the interest-rate sensitivity. Thus, long term bond ETFs would appreciate more than short-term bond funds in this environment. This is why long bond ETFs like TLT can see stock-like returns in a falling rate environment.
   
• TLT has been down 50% in Oct 2023 since its peak in 2020. Since then, it is gradually picking up. Some treasury investors went 'Full TLT', according to WSJ on 20 Mar 2024.

[AI Translation]

瑞士国家银行周四将其主要利率下调 25 个基点至 1.50%，这一出人意料的举措使其成为首家回调旨在应对通胀的紧缩货币政策的主要央行。最新预测显示，决策者对美联储基准隔夜利率的预期中值为 2025 年下降四分之三个百分点。摩根大通现在研究其他 "迷你 "宽松周期（即 1995 年和 2019 年）前后的收益率和曲线走势。平均而言，在首次降息前的六个月内，收益率往往会下降超过 125 个基点，我们认为曲线仍有从当前水平陡峭化的空间。

一般来说，利率每变动 1%，债券价格在每一年的存续期内就会反向变动约 1%。如果未来几个月通胀呈下降趋势，而美联储希望减少限制，那么 TLT 投资者可能会获得高达两位数的收益，这取决于通胀下降的幅度。这是因为通胀和利率密切相关，债券期限越长，对利率的敏感度就越高。因此，在这种环境下，长期债券 ETF 将比短期债券基金升值更多。这就是为什么像 TLT 这样的长期债券 ETF 在利率下降的环境中能获得类似股票的回报。

TLT 自 2020 年达到峰值以来，到 2023 年 10 月已经下跌了 50%。此后，它逐渐回升。据《华尔街日报》2024 年 3 月 20 日报道，一些国债投资者开始 "全仓 TLT"。

Product Solution

• Product can be called by the Issuer after 1 month and if so, investor will get a flat coupon. Ideal for investors not inclining to hold the product for the full term, seeking an early exit strategy with positive return. Should the underlying performance surge significantly, it is probable that the issuer will initiate an early call back of the product.
• If no issuer call, it functions similar to a regular Bonus Enhanced Note (BEN) at maturity, with the exception of an amplified upside participation, due to a leverage effect.

[AI Translation]

产品可在 1 个月后由发行人赎回，如果赎回，投资者将获得票息。该产品适合不打算持有该产品整个期限、寻求提前退出策略并获得正收益的投资者。如果相关业绩大幅飙升，发行人很可能会提前收回产品。

如果发行人没有要求赎回，该产品到期时的功能与普通红利增强票据（BEN）类似，但由于杠杆效应，其上涨参与度会放大。

Indicative Terms

Indicative only, subject to the confirmed level on the trade date

Key Risks

• The product is not principal protected and is subject to market volatility and product issuer risk.
• In the case of physical delivery, the value of the Underlying received by investors may be lower than their initial investment amount. Investors may experience a total loss of capital in the worst-case scenario.

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