Accelerated Return Note

An accelerated return note (ARN) is a type of investment that gives investors the chance to earn higher returns based on how well a specific asset, like a stock index or commodity, performs. The key feature of ARNs is that they multiply the positive performance of the asset, giving investors a bigger return if the asset does well, up to a certain limit. However, ARNs don’t protect investors from losses, so if the asset does poorly, the investor could lose money.

Example

If an ARN is linked to a stock index with a 3x multiplier and a 20% maximum return, a 5% increase in the index could give the investor a 15% return on the ARN. However, if the index drops, the investor could lose part or all of their money.