Hello, I am walking on top of that. I can see the captain. Today, I would like to explain the ELS (Equity-Linked Securities) product. Last time, I provided information about the D product, and it received a good response. It seems that many people are requesting it, so today I brought some ELS products.

This product is primarily an investment product, which means there is a possibility of principal loss. While you can earn a lot of profit, there is definitely a risk involved. In fact, many people who have subscribed to this product are seeing significant returns, which is why it is well-known. If your investment strategy is correct and you have a proper purpose for subscribing, it can be a product that yields high returns. However, if you subscribe simply because a staff member from a financial institution recommended it without understanding the product, and then end up losing money, it can be considered a scam. In any case, since there is no principal guarantee, it is important to ensure that it aligns with your personal risk tolerance.

If you think you won't be able to participate, then you shouldn't sign up. Therefore, before you enroll in this product, it is essential to understand the necessary information as thoroughly as possible. Today's video is a bit long, so I won't be splitting it into two parts. I hold all the necessary certifications, which allows me to recommend such products. However, this video is created to read and interpret the details of this product for you. When you go to the bank, there are many explanations, and they often pass by quickly without you realizing it, so please think of it as a presentation and watch it. Once again, I want to clarify that I am not recommending or promoting this product; this video is for understanding the product. Whether you choose to enroll in this product is entirely up to you. As you can see from the names ELS and ELB, this is a stock-linked investment product. A stock-linked investment product means that the returns are determined based on the performance of the stock index. The stock index will fluctuate, and this will be directly reflected in the product.

It refers to a product that is linked and reflects the decision on profitability. For example, it is determined that if the index does not drop below a certain level, a profit will be made. Many people are curious about the difference between ELS and ELF. There are many videos and a lot of information available online. If you look at the two, one is equity-linked securities (ELS), and the other is an equity-linked fund (ELF). The operating structures are slightly different, but from our customers' perspective, they are the same product. What is the difference between securities and funds? Generally, funds are managed by fund managers who collect money from clients and invest in various stocks or bonds on their behalf. So, have you noticed the difference between the two? ELF is a fund product that invests in multiple ELS.

You can think of it as a broader concept. If we were to find a difference, the managing entity for ELS is a securities company, while for ELF, it is an asset management company. Banks handle fund products, so they take this Apple and sell it as is. In the case of ELS, banks cannot issue it directly because it is a security. Therefore, they take what has been issued by the securities company and sell it in the form of this EAT. There is a slight difference here, such as in management fees, early redemption, or whether it automatically enters upon maturity, etc. There are some differences depending on the method, but going into detail would be endless. So let's just understand it at this level. The profit structure is the same. Now, I will talk about the products directly. In this video, I will focus on ELF.

To directly subscribe to ELS, you need to go through a securities company, but it can be difficult to visit in person, and it's somewhat challenging to view online. Therefore, it seems that most people tend to subscribe by visiting a bank. I would like to introduce a product that is sold at banks. If you look at the bank's website, you will find ELS listed separately under financial products. Now, let's look at the title: Meritz Index Young Generation Double Plus Securities Investment Trust H&M No. 28 ELS Derivative Type. Although the title may seem trivial, it contains a lot of information. When choosing from numerous products, you can get a general idea just by looking at the title without needing to click for more details. This is a product managed by Meritz, and it is a quality young generation product. The term Double Plus indicates that there are guard plus conditions, which is a good thing. I will explain this further later. Also, it is based on the Euro and Japanese indices as the underlying assets.

If you go in, I will look at the investment prospectus right away. You can see the screen that appears immediately, but there is a lot of omitted content. If you only want to look at the profit structure, you can just view it on this screen. However, if you actually want to sign up, you need to look at the investment prospectus. This investment prospectus is fine, and at the bank, they will provide you with this prospectus online while explaining it. If you don't understand, it can be overwhelming. It's hard to ask questions while trying to understand each point because you feel the pressure of the people waiting behind you. This is because signing up takes an incredibly long time—over 30 minutes. Internally, they are supposed to explain for about 50 minutes. There are many things that the bank staff must explain, but since they talk without stopping, it doesn't really sink in. It's possible that you might not understand everything.

Sometimes, you might just pretend to understand because it's embarrassing. After watching this video just once, you should be able to understand at least 50% when you sign up. First of all, your eyes will be drawn to the annual rate of 4.6%. Just looking at that, we will read more about the product. Let's take a look at this investment prospectus. It says investment, but it has about five pages. Among these, I will read only the parts that the bank or securities staff usually explain to help you judge the product. This is not a product recommendation; it's just an example, and I am explaining how to look at the product. The first thing you should look at is, if you scroll down, the characteristics of collective investment schemes. Am I right? The underlying assets are the Hong Kong Hang Seng Index, Euro Stoxx 50, and Japan's Nikkei 225.

I have one index, but this one has a lot—there are three of them. The price fluctuations of these three indices are interconnected, and early redemption is possible every six months. It is initially a three-year product. The returns will be determined based on the movements of these indices over the three years. 

To briefly explain the indices, they are composed of representative companies from the Hong Kong, European, and Japanese exchanges, selected from well-performing companies. You can simply type the name in the search bar to see a graph of the index fluctuations over the past ten years; it represents the major indices of those countries, similar to the KOSPI index. 

Now, let’s slightly break it down. Securities 0 ELS means it is a derivative type, and unit zero indicates that additional deposits are not allowed. The term open-ended means it is a fund that allows for redemption in the middle. You can redeem it midway. ELS is a product that can be sold. Next week, another product with a different structure and profit model will be released.

The lessons between securities tend to come up more frequently. This product is only available for sale until Thursday. There is also a limit; they say they will gather up to 1 trillion won. It may seem like a lot, but it's on a first-come, first-served basis. If the product is good, it can be sold out quickly. Below that, I will first explain the profit structure and then inform you about this product because that’s what I’m curious about. Let’s focus on what we are interested in. Now, if you turn the page, you will see that the formats differ slightly between each operating company and sales company. The way they present the information is also different. So, you need to pay attention to which items I am reading. This is just an example for your reference. Here it is; you can stop at the places with tables and graphs. What you need to pay attention to here are just these numbers. All products have the same introductory information.

This number is just for reference. In the case of ELD, it's easier to understand by looking at the graph, but here, the graph is so chaotic that we can interpret everything just by these numbers. Let's look at the numbers alone: 99, 10, 85, 85, 80, 60. To understand better, I will read the first one. 

In the case of intermediate assets, if the closing price of the underlying assets is more than 90% of the initial reference price, what this means is that our underlying assets are the KOSPI, Euro, and Nikkei indices, as I mentioned earlier. The initial reference index is determined by the closing price on March 31, 2019. You know how the KOSPI index is reported in the 8 o'clock news? That's it. The closing price of that day is set as the initial reference, and on March 4, the remaining rounds will all be determined based on this initial reference index.

You can see it in six-month intervals. If we go back and interpret it again, if the closing prices of the three indices of the underlying asset are all more than 90% of the closing price on March 4th on August 30th, then it will be redeemed early. On March 4th, all three indices were at 100. Looking at the schedule, six months later is August 31st. If the indices are all above 90 on August 31st, early redemption will occur. To put it simply, even if the indices drop by just 10%, the principal will be repaid, and it will provide an annual return of 4.6%. This means that you will receive a return of 2.325% automatically, and the product will be terminated. Even if you shout that you won't do it yet, it will automatically terminate without exception. Regardless of whether the indices rise by 10% or 20%, I will receive an annual return of 4.6%, and that’s the end of it. For three years, the initially set index will be compared every six months.

If the conditions are met, you receive profits while benefiting from it. This is referred to as an early situation. If the conditions are not met, the extension is granted for up to three years. For example, on March 4, 2019, the closing prices were as follows: the Hong Kong index was at 100, the Euro index was at 100, and the Nikkei index was also at 100. Then, on August 31, the Hong Kong index dropped to 80, while the Euro and Nikkei indices remained the same. All three indices need to be above 90%, but the Hong Kong index was at 85%. So, we decided to check again in six months, and the extension was granted. Then, six months later, on February 28, 2020, the schedule showed that the Hong Kong index remained at 80, and both the Euro and Nikkei indices had also dropped to 90. Still, none of the three indices maintained above 90%. Therefore, another six-month extension was granted. In this way, the third condition is to remain above 85%.

In the fourth period, it was over 85%, and in the fifth period, it was over 80%. Then, when was the last time? On March 2, 2022, the closing price of the Hong Kong index was 60, the Euro was 110, and the Nikkei was 80. This means that all three indices were more than 60% compared to the initial benchmark index of 100. So, after a year, we received an initial return of 13.9%. It doesn't matter how they moved in between. Even if the index dropped to 50% at some point, as long as it rose back above 60% on the expiration date of March 2, 2022, it would still be a product that provides returns. Here, I want to highlight the Guard Plus condition. This condition states that during the six-month period, if the global indices did not meet 90% or more, there was never a time when they dropped below 85% during trading hours.

In other words, it had only fallen within 15% over the past six months. During that time, they said they would allow early repayment under certain bonus conditions. There is one more condition that is slightly more favorable. The second is Guard Plus, which is the same. There are two options here, so the title of this product is Double Plus. However, now I will talk about something negative. The Hong Kong index fluctuated for two to three years, and it was extended to three years. On the day it reached three years, it suddenly dropped sharply by 3 o'clock. At that point, the Hong Kong Hang Seng Index could not stay within 60%. So, if you think about it, you would only receive 30% of the principal back. This is based on the largest drop in the index worldwide, resulting in a loss of principal. In a way, it seems quite risky, as it disregards the process and only looks at the conclusion.

However, this 60% is indeed quite attractive. Before the three years are up, there are several opportunities to receive profits and release the investment as long as you are satisfied. If things go well, it could be released every six months. Now, this raises the question of whether these indices have ever dropped below 60%. If you look closely at the investment prospectus, you will find the information. You can also find it online, but if you look at the recent price trends of the underlying assets, it has been shown since July 2012. It's hard to see, so let me explain verbally: excluding the KOSPI index, it hasn't really dropped to around 60% in a single day. However, the KOSDAQ index did experience a significant drop between 2015 and 2016, which was quite risky. But did that mean there were losses on the principal? Not necessarily. What is truly uncertain is whether, at the end of that period, the final three-year maturity point saw a recovery or not.

Three years ago, when I first joined, the underlying assets were determined, and products were released every week. If I had entered when the index improved slightly, I might have seen some profits. In this situation, it could either be a case of making a reasonable profit or suffering a loss of over 40% of the principal. As long as it doesn't drop below 60%, one might think it is somewhat stable. However, on the other hand, it is also a very risky product. Now that we understand the profit structure of this product, in the second video, I will cover the important information you need to know when joining and when canceling, as well as how to choose ELS products wisely. You need to watch the next video because if you don't, it could lead to problems. There are many risks involved, and if you just join without understanding, you might find yourself regretting it when the maturity date comes. So, please make sure to continue watching.

Yes, thank you. Please do it for Nongshim. Nongshim, we...

[ELS 1탄] ELS, ELF 상품설명서를 보면서 설명해드립니다. 은행원이 매번 권유하는데, 어떻게 수익을 받을 수 있는지 상품에 대해 설명해드립니다.

금융, 세무, 창업 분야의 초창기에, 그리고 아직도 겪고있는!
그동안 학교에서 가르쳐주지 않아서, 
사회 나와서 이렇게 은행갈 일, 세무서갈 일이 많을 줄 누가 알았겠나....
생소해서 어려움을 겪고 계시는
처음 시작하시는 분들께 도움이 되고 싶어 만든 개인채널입니다

전 1금융권 VIP실 은행원
현 개인사업자, 법인사업자 운영중 으로 

누군가의 의견이 아닌 내 스스로 판단할 수 있도록
기초적인 지식들을 쌓고 싶을 때 찾아주세요
금융, 세무 읽어드리고 해석해드립니다^^




* 비즈니스 메일 : clairecheonkh@naver.com  (업무용 메일로 개인 메일은 답변이 어려워요)



[ELS 1탄] ELS, ELF 상품설명서를 보면서 설명해드립니다. 은행원이 매번 권유하는데, 어떻게 수익을 받을 수 있는지 상품에 대해 설명해드립니다.

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