- The firm is offering up to $40 million worth of notes tied to two baskets of American stocks.
- The "Democrat Victory" note is tied to Ford , Home Depot , and Walmart , among other companies.
- The "Republican Victory" note is tied to tech and finance stocks, including Amazon , Facebook , and Visa .
- Visit the Business Insider homepage for more stories .
A Swiss bank is selling structured notes that strictly hinge on the outcome of the 2020 US presidential election, Bloomberg reported Tuesday.
Julius Baer Group is offering up to $40 million of notes tied to two baskets of American stocks. The vehicles are meant to profit should their corresponding political party take the White House in 2020. The bank's structured notes mature in one year, and holders will be paid the performance of the included stocks on the maturation date, Bloomberg reported.
Structured notes track the performance of an underlying asset or collection of assets, often through derivatives or other niche tools.
The private bank's "Democrat Victory" note is tied to:
Julius Baer's "Republican Victory" basket is tied to more tech and finance stocks, including:
Analysts have followed every twist and turn in the election cycle so far, weighing in on how different Democratic primary candidates would affect stocks and whether a Trump victory would see a similar continuation of the bull market. US stocks are positioned to face heavy volatility in the months leading up to the presidential election, UBS chief investment strategist Mike Ryan wrote in a November note.
The healthcare, technology, energy, and financial sectors are most exposed, as many Democratic candidates have frequently called for major reform in those areas, Ryan added.
Trump's largely unexpected victory in 2016 confounded investors, leading futures for the S&P 500 and Dow Jones Industrial Average to slump by as much as 4% overnight. Yet markets didn't take long to warm up to the Trump administration. The president's campaign featured promises to boost the US economy and revive ailing industries, leading investors to hope for widespread deregulation and economic stimulus.
The S&P 500 is up roughly 75% since Trump's win.
The structured notes boast entry costs between 1.28% and 1.4%, Bloomberg reported, placing their prices above most exchange-traded funds. However, the notes may be easier for issuers to create and sell.
The Julius Baer structured notes will be issued on January 29, according to Bloomberg.
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