• An equity-linked security is a debt instrument with variable payments linked to a stock market benchmark.
  • They are offered to investors so that the issuer can raise capital.
  • These securities are an alternative type of fixed income investment - structured products, most often created in the form of bonds.
  • ELKS typically have a one-year maturity and typically earn higher returns than the underlying security.
  • Some types of ELKS include corporate, bank-based and market-related.