Discover Investment Opportunities with our Yield Hunting Feature!

1、New 'Yield Hunting' feature is now live

Hello Tigers!

We are pleased to announce the launch of our new 'Yield Hunting' feature on the Wealth page.

With expectations of aggressive rate cuts in the U.S., principal-protected products are growing in popularity. Following two years of economic challenges, many investors have shifted to a more conservative risk appetite.

In today’s volatile market, structured notes—offering a balanced approach to both defense and growth—are becoming increasingly attractive.

Our 'Yield Hunting' feature integrates equities and structured notes, leveraging on data to selectively curate popular and trending stocks. Based on back-test profitability and expected returns, it provides strategic product offerings with greater certainty. The 'Yield Hunting' feature also enables users to view historical performance data and access in-depth fundamental strategy insights.

On the homepage, the top two FCN structured products with the highest daily annualised coupon rates are identified. They are calculated based on the fundamentals, trading activity, and profitability of the product based on its historical data.

Users can click on 'View More' to view all of our structured products, with criteria filters such as back-tested profitability, annualised coupon rate, maturity, and strike price to aid users in finding the product best suited to them.

2. Using 'Yield Hunting' for Structured Notes Investing

After selecting a specific product, users review the following metrics found on the detailed information page to make an informed decision.

1、Product Elements

Let's take this FCN with a 3-month-term and linked to Nvdia (NVDA) as an example. The product's current annualised coupon rate is 22.76%, and the back-tested profitability is 99.78%.

Coupon p.a. / annualised coupon refers to: the fixed coupons entitled on a yearly basis, in a scenario where no early knock out occurs.

This is a key metric, regularly used to measure revenue and to compare expected returns across different products.

In the above example, the annualised coupon is 22.76% p.a. Correspondingly, this would signify that the expected and entitled fixed rate of return is 22.76% p.a. With an investment of $200,000, your monthly return would be calculated as $200,000 × 22.76% p.a. ÷ 12 = $3793.33. Over a 3-month tenor, this translates to total returns of $11,380.

The back-test profitability rate simulates the historical data of the product's underlying asset in the past 2 years. By backtesting the product's performance under different scenarios, the contract ratio of early knock-out, expiration non-stock and expiration stock is calculated. This indicator is used to evaluate the latent risk of the FCN.

Again, using the above example, with a back-tested profitability rate of 99.78%, this indicates that the likelihood of achieving the expected returns is high (there were no cases of stock acquisition, early knock-out, or expiration without stock acquisition), with minimal risk of forced stock acquisition due to market volatility.

2、Strategy Analysis:

When analysising the strategy, users should pay attention to the 'Break-even price'.

The break-even price reflects the price at which your principle investment, in addition to the received coupons is sufficient to cover the market price of the stock at the product's expiry. In the case of the FCN above, as long as the stock price is above $94.49 at maturity, you will avoid incurring a loss. Any price above this break-even point results in a profit.

On the final observation date, even if early redemption is not triggered, you may still be required to purchase the stock at strike place. Although the purchase price is higher than the market price, the coupons received during the tenor of the FCN can potentially help to cushion losses. Depending on the coupons earned, this may even result in a situation where you will earn a small profit.

3、Valuation Trends:

Changes in a product's valuation can usually serve as an indicator of its current risk and potential return. Taking Nvidia FCN below as an example,

• Forward P/E (45.54): This is the price-to-earnings ratio based on expected future earnings. A forward P/E of 38.11 means the stock price is 45.54 times the future expected earnings. A high forward P/E suggests high expectations for future earnings but may also indicate overvaluation.

• Conversion P/E (35.31): This is another valuation metric used as a reference under stock conversion scenarios. A lower conversion P/E of 35.31 suggests that post-conversion, the P/E ratio may decrease, reflecting improved valuation and reduced risk.

• Red Line and Green Line (+1 and -1 Standard Deviation): These lines represent one standard deviation above and below the forecast P/E. The current forecast P/E is in a neutral range, indicating no significant overvaluation or undervaluation. The red line (51.28) marks the upper limit of overvaluation, while the green line (27.48) marks the lower limit of undervaluation.

• Current vs. Average: The current forward P/E of 39.38 is below the historical average of 41.54, indicating a relatively fair valuation but not particularly cheap.

4、Fundamentals:

Finally, let's review the target price forecasts and analyst recommendations. The data is aggregated weekly by Tiger Brokers based on information sourced from major research institutions.

This provides a clear view of the prevailing sentiment from mainstream analysts. However, these insights are for reference only and should not be the sole basis for investment decisions. It's essential to conduct a thorough analysis of the underlying asset and make an independent judgment.

That concludes today’s overview of the ’Yield Hunting‘ feature!

Have you mastered it? For more detailed scenarios and terms, you can refer to the 《FCN Product Manual》

If you have any questions, feel free to join our 《FCN Investment Course》 to learn more in-depth knowledge on investing in FCN products.

Wishing you successful investments and abundant returns! Leave a comment to earn Tiger Coins as a reward. 👏👏👏