How Kicker Bonds Work

BrandNew

I was doing research on this but do not have a full grasp of it, can anyone here sum it up?

Reaper

I assume you are talking about structured products. These are awash with small print and catches so if you are struggling with the concept of a kicker then they may not be for you.

Briefly though the idea is they will last for a set number of years (eg 5). However a test is done on each anniversary. If the test conditions are passed on that date (e.g. FTSE is higher than the start point) then the plan ends early and you are paid out (e.g. your investment + 10%).

You will need to read the details to find out what happens for your particular plan.

dunstonh

I thought it may be SCARPS but a google check indicates that kicker bonds are a US based product. In which case, the OP would be better off asking on a US forum and not a UK one.

BrandNew

Reaper wrote: »

I assume you are talking about structured products. These are awash with small print and catches so if you are struggling with the concept of a kicker then they may not be for you.

Briefly though the idea is they will last for a set number of years (eg 5). However a test is done on each anniversary. If the test conditions are passed on that date (e.g. FTSE is higher than the start point) then the plan ends early and you are paid out (e.g. your investment + 10%).

You will need to read the details to find out what happens for your particular plan.

I understand that kicker bonds will yield a fixed YTD before these kind of bonds are ''called'', but I would like to know who experiences with these kind of bonds.Is it best to sell these bonds after the call is made?

And I am not struggling with the concept.

Reaper

As Dunstonh says above it sounds like you are talking about a US product (a type of municipal bond I think?) and not the UK structured product I had assumed. As such you will be better off asking your question on a US forum rather than a UK one (which this one is).