This debt option offers high returns & capital preservation. Too good to be true?

When markets get tough, MLDs (market-linked debentures) get going. Or at least that's what wealth and relationship managers say. The sales pitch is that MLDs offer the best of both worlds. In a bearish scenario, they preserve your capital; in bullish times, they provide equity-like high returns, though there's a ceiling on how much you can earn. Let's consider one of the current MLDs promising 1.5 times the returns of its underlying index over two years. If the index grows 22 per cent, the investor stands to gain 33 per cent over two years. That's the most an investor can earn. Even if the index rises 50 per cent, the investor still earns 33 per cent. Conversely, if the underlying index goes red, the investor can recoup at least their original investment. But it's not all hunky-dory. While they can grow your wealth by 33 per cent, these ar