Why We Like Wells Fargo's SGI WISE US Index Equity Linked CD

This is Annuity FYI's top pick for an equity linked CD. We think it is an excellent investment opportunity for investors with a 6-year time horizon that want the security of FDIC insurance with the promise of market upside. We also think that it beats any fixed/equity-indexed annuity hands down (see the chart at the top left for a general comparison).
For more information, fill in the form below or call an Annuity FYI Expert directly at 1-866-223-2121.

Why We Like This Equity Linked CD

• Your principal is guaranteed by Wells Fargo and FDIC insured to the maximum amount permitted by law.
• There is no cap or spread, and 80-110% participation.
• This CD has an easy-to-understand, transparent point-to-point index.
• Returns are based on Société Générale's SGI Wise US Long-Short Index. This diversified index has not been around for very long (it was only introduced in April 2009). But the important thing is that it has been back-tested to 1992 to determine actual returns had one invested in the index in the past. We like that it is diviersified, and that it shows outperformance of the S&P500® over multple timeframes (see the second and third chart on the right). Just a few examples:
  • Average annual return of 14% over the past 16 years compared with 6% for the S&P500®.
  • Average annual return of 8.72% from June 2000 through January 2010 compared to -0.69% for the S&P 500®.
  • Since its introduction in April 2009, it has delivered an annualized return of 13.2% through the end of November 2009, compared with 6.5% for the S&P500®.
• Potential to outperform the current low interest rate environment with the same guarantees you count on from your traditional fixed rate of return FDIC insured CD.

Consider Before You Invest

• 6-year holding period, and as such liquidity is limited. The issuer advertises that upon liquidation prior to the maturity date, redemption would occur at the current market price less a 1% penalty. This is far less than a fixed/equity-indexed annuity, but nonetheless you should not purchase this CD unless you intend to hold it for the entire 6 years with no withdrawals.
• All gains if any are paid at the end of the holding period. Taxes may be payable annually on assumed or calculated rates of return.
• No dividends.

For more information, fill in the form below or call an Annuity FYI Expert directly at 1-866-223-2121.

Updated 07/12/2010.

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