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Market Linked CDs

Market Linked Certificates of Deposit (MLCDs)              

For investors who place a priority on principal protection, but who wish to maintain some exposure to the markets, Market Linked Certificates of Deposit (MLCDs) may represent an innovative alternative in today's uncertain economy. MLCDs offer principal protection when held to maturity (up to $250,000 of which is insured by the FDIC), but also offer potential returns based on the performance of various market measures, such as gold, silver, equities, commodities, or a basket of foreign currencies. Currently, Euro Pacific Capital is offering three MLCDs for the month of July (each with a minimum investment of $25,000) that track the following strategies and asset classes:

  1. A Non-US Dollar CD based on four currencies - (Australian Dollar, Canadian Dollar, Norwegian Krone, and Singapore Dollar). This CD has negative correlation to the U.S. dollar. It goes up if the dollar falls and vice-versa. (Principal is protected if held to maturity)

These products will be open for investment through November 25, 2013. We will continue to offer new products on a monthly basis.

Euro Pacific clients who are interested in these products should ask their Investment Consultants for more information. Non-Euro Pacific clients should call Euro Pacific directly at 800-727-7922 and ask to speak with the Client Service Team. Market linked CDs are sold only by prospectus and may not be suitable for all investors. Investors should read the prospectus carefully for a more complete description of the risks associated before investing. 

About Market Linked CDs  

  • Equity Exposure - MLCDs offer the opportunity to participate in upside performance of an underlying market measure, subject to the terms of each specific MLCD. Participation rates and performance caps may limit investor's returns relative to the performance of the underlying asset. The amount of any interest payments on the CDs is uncertain, may be zero and may be subject to a cap.    
  • 100% Principal Protection - The principal portion of an MLCD is guaranteed by the issuing bank when held to maturity. Early withdrawal, in addition to penalties which may apply, could lead to a loss of principal.    
  • FDIC Insured - FDIC insurance protects the deposits up to $250,000 for all deposits held in the same capacity per depositor, per institution.*  
  • Diversification - Various MLCDs may track a variety of domestic and/or global indices. 
  • Low Minimum Investment - MLCDs are available for a minimum investment of $25,000 and increments of $1,000 thereafter.    
  • Estate Feature - Allows for redemption of the full principal amount at par, without interest, upon death or the adjudication of incompetence of the beneficial owner under certain circumstances, subject to the terms of the specific MLCD.    
  • Secondary Market- Secondary markets for these securities may or may not exist.  

Risks & Considerations 

Purchasing the CDs involves a number of risks. It is suggested that prospective depositors reach a purchase decision only after careful consideration with their financial, legal, accounting, tax and other advisors regarding the suitability of the CDs in light of their particular circumstances. The following highlight some, but not all, of the risks involved in purchasing the CDs.

  • The CDs are designed to be held to maturity and you may experience a loss of principal if you withdraw your funds prior to maturity.
  • No secondary market may develop for the CDs.
  • Certain built-in costs are likely to adversely affect the value of the CDs prior to maturity. As a result, the price, if any, at which the issuing bank will be willing to purchase the CDs from investors in secondary market transactions, if at all, will likely be lower than the original issue price and any sale prior to the maturity date could result in a substantial loss.
  • The deposit is a liability of the Issuer. Any deposit amount payable under the CDs that exceeds the applicable FDIC insurance limit, as well as any amounts payable under the CDs that are not insured by the issuing bank, are subject to the creditworthiness of the Issuer.
  • Deposit amount is not guaranteed if the CDs are not held to maturity.
  • You will have no ownership rights in the Reference Indices, the Designated Contracts and/or the commodities to which the designated Contracts relate. Purchasing a CD is not the equivalent of purchasing the Reference Indices.
  • Your interest payments, if any, may be less than those of a traditional CD of comparable maturity.
  • Market conditions and events affecting the commodity markets to which the Reference Indices relate may reduce or eliminate interest payments to depositors.

*FDIC Insurance: FDIC insurance does not protect against loss if the MLCD is sold or redeemed prior to maturity. Furthermore, FDIC insurance applies only to the principal amount and the accrued interest, if any, of the MLCD. Amounts exceeding the FDIC limits are subject to the credit of the issuer. 

Check the background of our investment professionals on FINRA’s BrokerCheck.

Investing in foreign securities involves risks, such as currency fluctuation, political risk, economic changes, and market risks. Precious metals and commodities in general are volatile, speculative, and high-risk investments. As with all investments, an investor should carefully consider his investment objectives and risk tolerance as well as any fees and/or expenses associated with such an investment before investing. International investing may not be suitable for all investors.

Dividend yields change as stock prices change, and companies may change or cancel dividend payments in the future. The fluctuation of foreign currency exchange rates will impact your investment returns. Past performance does not guarantee future returns, investments may increase or decrease in value and you may lose money.

Our investment strategies are based partially on Peter Schiff's personal economic forecasts which may not occur. His views are outside of the mainstream of current economic thought. Investors should carefully consider these facts before implementing our strategy.