These are one of those things that help the rich get richer.
If by "rich get richer" you're referring to the people selling you this crap, then yes, I'd agree.
As stated, you're only participating in the price return of the securities. This is a horribly bad idea when the securities have high dividends, since each dividend payment reduces the price of the stock by the same percentage of the dividend payment.
Let's see if we can come up with an equation for the breakeven point where you'll make just as much money with this instrument, vs simply buying the stocks, assuming dividends stay at 5%:
P*(X +1) + 0.28P = P*(3X + 1)
P: Original price
X: % price rise during 5 years
The left side is simply buying the stocks, and the right side is the "too good to be true" thing they're selling you. Let's take price at 100, and solve for X:
100X + 100 + 28 = 300X + 100
100X + 128 = 300X + 100
28 = 200X
28/200 = X
0.14 = X
So the breakeven point is 14%. The stock price needs to grow
more than 14% for this deal to make sense, versus simply buying the stocks directly. Ok, let's look at a price chart with these 5 banks and see how well they did over the last 5 years, one of the most explosive stock markets in history, which is unlikely to repeat itself over the
next 5 years:
Ouch. Does this still look like a good deal to you? Remember, if something sounds "too good to be true", it probably is.