Equity-linked debentures (ELDs) are fixed income products that provide both capital protection and participation in stock market returns. ELDs invest a portion of principal in fixed income securities to provide capital protection, and the remainder in stock options to provide equity exposure. This structure aims to offer returns higher than fixed maturity plans but lower risk than direct equity investments. ELDs guarantee return of principal at maturity while offering a return linked to the performance of an underlying stock index over the investment period.

3. Simply put… ‘Equity Linked Debentures’ are popularly known as capital protection funds & give you the upside of equities and protect the downside!

4. As per the risk return chart above, ELDs offer better returns than FMP at a lower risk than equities.

5. Typical Payoff Scenario In a typical payoff scenario, as illustrated above, ELDs, on an average, offer better returns than FMPs and even when the Nifty goes down, you recover your principal amount.

10. To finally illustrate… Principal Remains Intact Equity Linked Debentures (ELD) Equity Market Participation