Accelerated Return Note
What is an accelerated return note?
A return is the loss or gain of a security over a particular time span. An accelerated return is a short to medium span debt device. The notes offer a capped leverage return, but on average do not offer any drawback protection, which marginalises its appeal among investors.
Where have you heard about accelerated return notes?
From 2010 – 2012 these notes were offered by the Bank of America (owned Merrill Lynch), but were linked to Gold Spot Pricing in 2013. In the end, these notes proved unpopular with retail investors.
What you need to know about accelerated return notes.
Accelerated return notes seem to pit the investors interests against the interests of those handling their money – however this isn’t always the case. When considering an ARN, experts generally agree that it is best to take a look at the price history and volatility of the underlying index fund.