A leveraged buffered note linked to the S&P500 and issued by Goldman Sachs has provided investors with a 120% return of initial capital after just 18 months of investment. $6.75m will be available to the bank to roll over into new investments.
The capped call structure promised to pay back the initial investment in addition to 200% participation in the rise of the index over the term, subject to a maximum overall return of 120%. Had the final index level fallen by more than 15% compared to its initial level, capital would have been reduced by 1.1765% for every 1% fall in the underlying.
The initial index reading was taken on 21 July 2010 and read 1069.59 and the final reading stood at a level of 1316.0 on 23 January 2012, a growth of approximately 23.03% which, after discounting the leverage factor, provided the maximum possible overall return of 120%.
Goldman Sachs has launched 31 products so far in January with an estimated sales volume of $176m.
This product appears on the US database.