RIA Ideas - Tech Safety in a selloff?

Vinay Tolia |
Categories
Weekly Market Commentary

 

Income Note — Tech Leg Swap

On an income note the coupon grabs the eye — but downside risk is what actually matters, and the tech leg you pick is what drives it.

A worst-of income note often pairs the S&P 500 and Russell 2000 with a Nasdaq tech leg — NDX or NDXT. Both are up double digits in 2026 and sit near their highs. Swap that leg to software (IGV) and the picture flips: IGV is down 15% on the year and 26% off its high (Yahoo Finance, 6/23/2026).

Here’s the part that matters for income: in a worst-of, your downside rides on the weakest leg — so a leg that has already pulled back may sit more comfortably above a barrier than one near its highs. And choosing IGV doesn’t cost you yield to get there: swapping it in for NDX or NDXT actually prices a higher coupon. You may pick up both a better entry point and more income from the same structure.

The three tech legs, by 2026 run-up and distance from their highs

Quadrant of NDX, NDXT, IGV by YTD run-up and percent below 52-week high. NDX (+16% YTD, 4% off high) and NDXT (+38% YTD, 5% off high) sit up and near their highs; IGV (-15% YTD, 26% off high) is alone in the down-and-off-its-high quadrant.

Yahoo Finance, as of 6/23/2026 · marinelayeradvisors.com/insights

Ways To Express This Idea

Same worst-of note — only the tech leg changes:

Same worst-of note, three tech-leg formats. SPX/RTY/NDX is the baseline; SPX/RTY/NDXT prices +13% more coupon; SPX/RTY/IGV prices +22% more — the highest of the three.

IGV gives the highest coupon of the three — and it’s the one that’s down on the year.

Want to see where the IGV version prices for your book?

This material is for informational purposes only and does not constitute a recommendation. Data sourced from public sources (Yahoo Finance) and has not been independently verified. Past performance is not indicative of future results. Structured notes involve risks including potential loss of principal. Worst-of notes expose the investor to the single worst-performing underlier, and downside below the barrier is borne in full by the investor. Coupon comparisons are indicative, illustrative only, and do not represent actual structured note pricing, which is subject to issuer credit risk, market conditions, and availability at time of execution.