An FDIC-Insured Double-Digit Return?

Alexander Green
by Alexander Green, Chief Investment Strategist, The Oxford Club
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At The Oxford Club’s Private Wealth Seminar at the beautiful Four Seasons Resort in Santa Fe this week, a number of investment analysts offered our Members their outlooks on stocks, bonds, currencies, metals and other investable assets.

There were plenty of exciting investment ideas. One of the most compelling, in my view, came from Chris Gaffney, president of World Markets at EverBank.

The bank, acquired by TIAA earlier this year, is offering a unique CD with 46.6% upside potential... and perhaps much more.

This takes a bit of explaining, but stick with me a moment because comprehending this is well worth your while.

Certificates of deposit used to be considered boring, ho-hum investments best suited for widows and orphans.

And when it comes to traditional CDs, that’s still pretty much the case. According to Bankrate, the average three-year CD in this country currently yields 1.74%.

Try to control your excitement.

However, some banks now offer nontraditional CDs with far more upside potential and the same federal insurance (FDIC) that guarantees your safety of principal.

EverBank is one of them. Its new MarketSafe Emerging Currencies CD offers you bold earnings potential over the next three years with absolutely no risk to your principal.

Here’s how it works...

The MarketSafe Emerging Currencies CD is a dollar-denominated three-year CD whose return is based on the performance of five emerging market currencies: the Brazilian real (BRL), the Chinese renminbi (CNH), the Indian rupee (INR), the Indonesian rupiah (IDR) and the Turkish lira (TRY).

Make no mistake. These are volatile currencies that fluctuate widely against the dollar.

However, I’m bullish on emerging markets. They represent over three-quarters of the world’s landmass and 85% of its population.  (India and China alone have more than 2.7 billion people.)

Countries like these will be the primary engine of world growth for decades to come. And while I cannot say with any certainty where these currencies will be in three years, there is a good possibility that the majority of them - and possibly all of them - will be higher against the dollar.

Rather than accruing interest, this MarketSafe CD will pay out the sum of these currencies’ appreciation against the dollar over the next three years multiplied by a leverage factor of seven.

To take an example, let’s say these five currencies average 6.66% appreciation against the dollar over the term, which begins on October 11, 2017, and ends on October 15, 2020.

EverBank will multiply that return for CD holders sevenfold. So, for instance, a $10,000 CD would earn a total return of 46.62%, or $4,662.

If the currencies appreciated more, your return would be greater. If they appreciated less, your return would be less.

However, even if most of these currencies (or all of them) went down against the dollar, you would still receive 100% of your principal back. And that’s FDIC guaranteed.

If you only got back your principal, yes, you would have lost out on the meager yield you could have collected in a traditional CD. But that’s a small price to pay to earn a potential 33%... 46%... or 88% return over the next three years.

The announced funding deadline for EverBank’s MarketSafe Emerging Currencies CD is September 28. (Yep, that’s tomorrow.)

However, EverBank is extending that deadline for an extra week for interested readers. This gives you time to set up an account and send the bank a check.

It’s an excellent opportunity to diversify outside the dollar and earn up to seven times the return of these five foreign currencies - with no cap on the upside and 100% principal security.

This is an unusual situation and a timely opportunity, in my view. For more information, call EverBank’s World Desk at 877.503.3837 and ask about its MarketSafe Emerging Currencies CD.

I’ll bet that three years from now you’ll be glad you did.

Good investing,


Thoughts on this article? Leave a comment below.

Note: Alex’s article exemplifies one of the perks of Oxford Club events - they’re a great place to find exciting new investment ideas.

For a chance to meet Alex (and all of the Club’s other strategists) in person, book a spot at the 20th Annual Investment U Conference.

The conference runs March 15-18 at the Four Seasons Las Vegas. Spots are already running low - book yours before it’s too late.

The Best Investment Class in the World Right Now

As Alex said above, there are many reasons to be bullish on emerging markets. His Oxford Communiqué subscribers already know this.

That’s because Alex has recommended the Templeton Emerging Markets Fund (NYSE: EMF) in his Oxford All-Star Portfolio since 2002.

Here’s Alex checking on the fund back in the spring...

The Templeton Emerging Markets Fund is a longtime member of our Oxford All-Star Portfolio. Our shares are up 282%.

The fund invests in Latin America, Asia and Eastern Europe, and is run by Dr. Mark Mobius, the world’s best-known and most successful emerging markets fund manager.

He is a dedicated value buyer who makes a habit of getting on his private jet and visiting the management and operations of every company before it goes into the fund’s portfolio.

Templeton Emerging Markets is a closed-end fund. It has both a daily net asset value and a market price that fluctuate day to day.

“But why should I invest my hard-earned capital,” an investor once asked me, “in places I wouldn’t even visit myself?”

First off, anyone who hasn’t visited Hong Kong, Argentina or the Czech Republic doesn’t know what they’re missing. But the real answer is performance and diversification.

Emerging markets will be an engine of world economic growth for decades to come. Consider the demographics. These countries contain three-quarters of the world’s landmass and nearly 85% of the people. China and India alone make up nearly a third of the world’s population.

Consumers in emerging markets need everything we take for granted in the West: housing, automobiles, healthcare, credit cards, computers, smartphones, insurance and so on.

However, countries like Brazil and India and China are not going to let Western firms come in and pick all the low-hanging fruit. If you want to reap the maximum benefit from the world’s biggest economic development story, you need to have part of your portfolio in these markets themselves.

Also, consider the diversification value. These stocks don’t move in lockstep with those in the developed world. In technical terms, when ours zig, theirs often zag.

That means owning these assets doesn’t just generate higher total returns. When you blend emerging market equities with developed market shares, it actually reduces your portfolio’s volatility.

- Samuel Taube with Alexander Green

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