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Market Linked Investments

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Wells Fargo Securities offers a variety of Market Linked Investments that are available through Wells Fargo affiliates and third-party broker dealers.
Market Linked Investments have complex features and are not suitable for all investors. Before deciding to make an investment you should read and understand the applicable offering documents provided by the applicable issuer. Please click on "General Risks and Investment Considerations" below for a discussion of general risks and investment considerations applicable to Market Linked Investments.

Market Linked CDs

Market Linked CDs are certificates of deposit that provide for the return of your original deposit amount at maturity, while also offering the potential for a supplemental payment at maturity or periodic interest based on the performance of an underlying market measure.

Market Linked Notes

Market Linked Notes typically allow you to participate in the potential appreciation of an underlying market measure, possibly subject to a cap, while also protecting against potential declines in the market measure.
If held to maturity, these investments provide for the repayment of an investor's initial principal amount, regardless of the performance of the underlying market measure, subject to the ability of the issuer to make payments when due. If the issuer defaults on its payment obligations, investors could lose their entire investment.
You should carefully review the offering documents for a particular Market Linked Note to understand how the appreciation of the underlying market measure will be measured. It is possible that the applicable method of measurement may result in a return on the Market Linked Note that is less than might have been realized on a direct investment in the underlying market measure. Market Linked Notes are unsecured debt securities of the applicable issuer, and investors will have no ability to pursue the underlying market measure or any assets included in the underlying market measure for payment.

Market Linked Notes With Partial Downside Protection

Occasionally, we offer Market Linked Notes with a maximum potential loss of up to 10% of principal if held to maturity, subject to the ability of the issuer to make payments when due. These notes provide for a minimum payment at maturity of 90% of the principal amount or greater.
These notes are referred to as Market Linked Notes with partial downside protection and will be specifically identified as such.

Market Linked Securities

For investors who are willing to accept a potential loss at maturity of greater than 10%, we offer Market Linked Securities.
Market Linked Securities typically provide you with the opportunity to earn enhanced returns based on the performance of an underlying market measure if the market measure appreciates, usually subject to a cap, while exposing you to a potential loss of principal if the market measure depreciates.
These securities may include some form of limited protection against declines in the market measure if held to maturity, subject to the ability of the issuer to make payments when due. If a Market Linked Security provides a measure of protection against declines in the underlying market measure, investors will be repaid their principal at maturity so long as the market measure does not decline below a specified threshold level. However, if the underlying market measure does decline below the threshold level, investors will incur a loss on their investment. The degree of that loss will depend on the type of protection provided by the Market Linked Security. In any case, any protection provided by a Market Linked Security against a decline in the underlying market measure will be limited, and you may incur a substantial loss on your investment. Any protection applies at maturity only and, if the issuer defaults, you could lose your entire investment.
You should carefully review the offering documents for the particular Market Linked Security you are considering to ensure that you understand the terms of any protection it offers against declines in the market measure.
Market Linked Securities are unsecured debt securities of the applicable issuer, and investors will have no ability to pursue the underlying market measure or any assets included in the underlying market measure for payment. Any enhanced returns and protection apply at maturity only and are subject to the ability of the issuer to make payments when due.

About Market Linked Investments

These investments can:
  • Help you gain exposure to a variety of asset classes while potentially reducing exposure to a decline in an underlying market measure if the Market Linked Investments are held to maturity, subject to the ability of the issuer to make payments when due. Not all Market Linked Securities provide protection against a decline of the underlying market measure, however.
  • Be used as an alternative to a direct investment in the underlying asset classes, as part of an overall asset allocation strategy, or as a complement to other direct investments in the underlying asset classes with a different risk-return profile than those other investments.

What are Market Linked Investments?Show Details

 
Our Market Linked Investments generally offer no fixed coupon and instead provide for a payment at maturity or on specified dates during their term, based on the performance of an underlying market measure.
In the case of Market Linked Notes with partial downside protection and Market Linked Securities, the payment at maturity may be less than the original principal amount.
Characteristics of Market Linked Investments
  • Maturity: Typically between one and 15 years.
  • Market measure: Linked to the performance of equities, currencies, commodities, or a combination of one or more asset classes.
  • Minimum investment: Available in increments of $1,000, typically with a $1,000 minimum investment.
Advantages of Market Linked Investments
  • Exposure to a variety of asset classes: Asset classes underlying Market Linked Investments may include domestic and international equities, commodities and currencies. However, Market Linked Investments are not equivalent to investing directly in those asset classes. Investors will have no ability to pursue the underlying market measure or any assets included in the underlying market measure for payment. If the issuer defaults on its payment obligations, investors could lose their entire investment.
  • Accessibility: Participation in investment opportunities that may otherwise be difficult to replicate as an individual investor.
Estimated Value of Market Linked Investments
  • The original offering price of each Market Linked Investment will include certain costs that are borne by you. Because of these costs, the estimated value of a Market Linked Investment on the pricing date will be less than the original offering price. If specified in the applicable offering document, these costs may include the underwriting discount or placement fee, the hedging profits of the issuer's hedging counterparty (which may be an affiliate of the issuer), hedging and other costs or fees associated with the offering and costs relating to the issuer's funding considerations for instruments of this type. See "General risks and investment considerations" below and the applicable offering document for more information.
  • The issuer will disclose the estimated value of a Market Linked Investment in the applicable offering document. The estimated value of a Market Linked Investment will be determined by estimating the value of the combination of hypothetical financial instruments that would replicate the payout on the Market Linked Investment, which combination consists of a non-interest bearing, fixed-income bond and one or more derivative instruments underlying the economic terms of the Market Linked Investment. You should read the applicable offering document for more information about the estimated value of a Market Linked Investment and how it is determined.

General Risks and Investment ConsiderationsShow Details

 
  • Principal risk. Market Linked Securities and Market Linked Notes with partial downside protection do not provide for the full return of principal at maturity in all circumstances. Market Linked Securities may not provide for any minimum payment at maturity, and you could lose your entire investment.
  • Performance risk and opportunity costs of Market Linked Notes and Market Linked CDs. Because many Market Linked Notes and Market Linked CDs offer a below-market minimum return or no minimum return at all, the yield that you will receive on your Market Linked Notes or Market Linked CDs may be less than the return you could earn on other investments, including a traditional interest-bearing debt security or certificate of deposit with the same maturity date of the applicable issuer or another issuer with a similar credit rating, and could be zero.
  • Performance risk of Market Linked Securities. Market Linked Securities do not repay a fixed amount on the stated maturity date. The amount you receive at maturity typically depends on the change in the level of the underlying market measure over the term of the Market Linked Securities. As a result, the redemption amount you receive on Market Linked Securities at maturity may be more or less, and possibly significantly less, than the original offering price of such Market Linked Securities.
  • Limited upside. The return on certain Market Linked Investments may be limited by a predetermined maximum return cap and, as a result, may be lower than the return on a direct investment in the applicable underlying market measure.
  • Liquidity risk. Market Linked Investments are not appropriate for investors who may have liquidity needs prior to maturity. Market Linked Investments are typically not listed on any securities exchange and are generally illiquid instruments. Neither Wells Fargo Securities nor any other person is required to maintain a secondary market for any Market Linked Investment. Accordingly, you may be unable to sell your Market Linked Investments prior to their maturity date. If you choose to sell a Market Linked Investment prior to maturity, assuming a buyer is available, you may receive less in sale proceeds than the original offering price, even in the case of Market Linked Notes and Market Linked CDs.
  • Market value uncertain. Market Linked Investments are not appropriate for investors who need their investments to maintain a stable value during their term. The value of Market Linked Investments prior to maturity will be affected by numerous factors, such as the performance and volatility of the underlying market measure; market interest rates; the time remaining to maturity; the dividend rate of the market measure, if applicable; the correlation among basket components, if applicable; and the applicable issuer’s creditworthiness. If the Market Linked Investments are subject to a predetermined maximum payment at maturity, Wells Fargo Securities anticipates that their value will always be at a discount to that amount.
  • Costs to investors. The original offering price of Market Linked Investments will include certain costs that are borne by you. These costs will adversely affect the economic terms of the Market Linked Investments and will cause their estimated value on the pricing date to be less than the original offering price. If specified in the applicable offering document, these costs may include the underwriting discount or placement fee, the hedging profits of the issuer’s hedging counterparty (which may be an affiliate of the issuer), hedging and other costs or fees associated with the offering and costs relating to the issuer’s funding considerations for instruments of this type. These costs will adversely affect any secondary market price for the Market Linked Investments, which may be further reduced by a bid-offer spread. As a result, unless market conditions and other relevant factors change significantly in your favor following the pricing date, any secondary market price for the Market Linked Investments is likely to be less than the original offering price.
  • Credit risk. Market Linked Securities and Market Linked Notes are subject to the ability of the issuer to make payments when due. If the issuer defaults on its payment obligations, you could lose your entire investment. In addition, the actual or perceived creditworthiness of the issuer may affect the value of Market Linked Securities and Market Linked Notes prior to maturity. In the case of Market Linked CDs, any amount owed to you will be subject to the ability of the issuer to make payments when due to the extent that the amount is not covered by FDIC insurance, which is subject to certain limitations. As an investor in any Market Linked Investment, you will have no ability to pursue the underlying market measure or any assets included in the market measure for payment
  • No periodic interest or dividends. Market Linked Investments typically do not provide for the payment of periodic interest. Market Linked Investments do not provide for the pass-through of dividends paid on equity market measures.
  • Estimated value considerations. The estimated value of a Market Linked Investment that is disclosed in the applicable offering document will be determined by the issuer or an underwriter or distributor of the offering, which underwriter or distributor may be an affiliate of the issuer and may be Wells Fargo Securities. The estimated value will be based on the issuer’s or the underwriter’s or distributor’s proprietary pricing models and assumptions and certain inputs that may be determined by the issuer or underwriter or distributor in its discretion. Because other dealers may have different views on these inputs, the estimated value that is disclosed in the applicable offering document may be higher, and perhaps materially higher, than the estimated value that would be determined by other dealers in the market. Moreover, investors should understand that the estimated value that is disclosed in the applicable offering document will not be an indication of the price, if any, at which Wells Fargo Securities or any other person may be willing to buy the Market Linked Investment from you at any time after issuance.
  • Conflicts of interest. Potential conflicts of interest may exist between investors and the issuer and/or Wells Fargo Securities. For example, the applicable issuer, Wells Fargo Securities or one of their respective affiliates may engage in business with companies whose securities are included in an underlying market measure, or may publish research on such companies or a market measure. In addition, the applicable issuer, Wells Fargo Securities or one of their respective affiliates may be the calculation agent for the purposes of making important determinations that affect the payments on Market Linked Investments. Finally, the estimated value of the Market Linked Investments may be determined by the issuer or an underwriter or distributor of the offering, which underwriter or distributor may be an affiliate of the issuer and may be Wells Fargo Securities.
  • Effect of trading and other transactions. Trading and other transactions by the applicable issuer, Wells Fargo Securities or one of their respective affiliates could affect the underlying market measure or the value of the Market Linked Investments.
  • Call risk. A Market Linked Investment may be callable at the option of the applicable issuer. If the issuer exercises its call right, it will pay the call price on the call date. The issuer has no obligation to call a callable Market Linked Investment and any decision to call a callable Market Linked Investment will be made in its sole discretion when it is most advantageous for the issuer to do so. If a Market Linked Investment is called, it is possible that the investor may not be able to reinvest the proceeds at the same or greater yield.
  • Basket risk. If the market measure is a basket, the basket components may offset each other. Any appreciation of one or more basket components may be moderated, or wholly offset, or more than offset, by depreciation of one or more other basket components.
  • ETF risk. If the market measure is an exchange-traded fund (ETF), it may underperform the index it is designed to track as a result of costs and fees of the ETF and differences between the constituents of the index and the actual assets held by the ETF. In addition, an investment in Market Linked Investments linked to an ETF involves risks related to the index underlying the ETF, as discussed in the next risk consideration. If the index includes foreign securities, in addition to the risks described below, the Market Linked Investment will be subject to currency exchange rate risk, as the value of the ETF will be adversely affected if the currencies in which the foreign securities trade depreciate against the U.S. dollar.
  • Index risk. If the market measure is an index, or an ETF that tracks an index, your return on the Market Linked Investment may be adversely affected by changes that the index publisher may make to the manner in which the index is constituted or calculated. Furthermore, if the index represents foreign securities markets, you should understand that foreign securities markets tend to be less liquid and more volatile than U.S. markets and that there is generally less information available about foreign companies than about companies that file reports with the U.S. Securities and Exchange Commission. Moreover, if the index represents emerging foreign securities markets, the Market Linked Investment will be subject to the heightened political and economic risks associated with emerging markets
  • Commodity risk. Market Linked Investments linked to commodities will be subject to a number of significant risks associated with commodities. Commodity prices tend to be volatile and may fluctuate in ways that are unpredictable and adverse to a holder of a Market Linked Investment. Commodity markets are frequently subject to disruptions, distortions and changes due to various factors, including the lack of liquidity in the markets, the participation of speculators and government regulation and intervention. Moreover, commodity indices may be adversely affected by a phenomenon known as “negative roll yield,” which occurs when future prices of the commodity futures contracts underlying the index are higher than current prices. Negative roll yield can have a significant negative effect on the performance of a commodity index. Furthermore, for commodities that are traded in U.S. dollars but for which market prices are driven by global demand, any strengthening of the U.S. dollar against relevant other currencies may adversely affect the demand for, and therefore the price of, those commodities.
  • Currency risk. Market Linked Investments linked to currencies will be subject to a number of significant risks associated with currencies. Currency exchange rates are frequently subject to intervention by governments, which can be difficult to predict and can have a significant impact on exchange rates. Moreover, currency exchange rates are driven by complex factors relating to the economies of the relevant countries that can be difficult to understand and predict. Currencies issued by emerging market governments may be particularly volatile and will be subject to heightened risks.
  • Tax considerations. You should review carefully the relevant offering documents and consult your tax advisors regarding the application of the U.S. Federal income tax laws to your particular circumstances, as well as any tax consequences arising under the laws of any state, local, or foreign jurisdiction.
Market Linked Investments are not suitable for all investors. Please contact a financial advisor to learn if Market Linked Investments are right for you.
Risks related to Market Linked Investments will vary depending on the terms of such products. Prior to investing in any Market Linked Investment, you should carefully review the related offering documents, including the discussion of risks that apply to such product.
 
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Wells Fargo Securities is the trade name for the capital markets and investment banking services of Wells Fargo & Company and its subsidiaries, including Wells Fargo Securities, LLC, a member of NYSE, FINRA, NFA and SIPC, Wells Fargo Institutional Securities, LLC, a member of FINRA and SIPC, Wells Fargo Prime Services, LLC, a member of FINRA, NFA and SIPC and Wells Fargo Bank, National Association. Wells Fargo Securities, LLC carries and provides clearing services for Wells Fargo Institutional Securities, LLC customer accounts.
Market Linked Investments are sold only in conjunction with the related offering document.
The information provided on this webpage is intended for people in the United States only.
Each issuer of a Market Linked Note or Market Linked Security has filed a registration statement (including a prospectus) with the Securities and Exchange Commission (SEC) for any offering of Market Linked Notes or Market Linked Securities to which this communication relates. Before you invest, you should read the prospectus in the applicable registration statement and other documents the applicable issuer has filed with the SEC for more complete information about the issuer and the offering. You may get these documents for free by visiting EDGAR on the SEC website at www.sec.gov. Alternatively, the applicable issuer, any underwriter or any dealer participating in the offering will arrange to send you the applicable prospectus if you request it by calling your financial advisor or by calling Wells Fargo Securities at 1-888-215-4145.