The higher volatility of many small and mid caps can be exploited for more than just direct investments. For the new underlyings Leonteq is employing an innovative double coupon autocall that combines two earnings components. The first of these is particularly simple: however the three shares perform, the investor gets a guaranteed coupon every quarter. There is also a second, conditional coupon. Every three months, all underlyings are reviewed to determine whether they are trading at or above their respective initial level. If this condition is met, the product is repaid early at 100% of the nominal. The conditional coupon for each quarter that has elapsed until then is paid out at the same time. If the autocall threshold is ever missed, then, the memory effect means that this second coupon opportunity is not lost, but can be recovered if the threshold is hit at a later observation date.<\/p>\n\n
The double coupon autocall on Komax, Kuros Biosciences and R&S Group has a particularly aggressive structure. The CHF product invested for one year pays a guaranteed coupon of 14.4%, corresponding to 3.6% per quarter. On top of this comes a conditional memory coupon of the same amount. The autocall is triggered if all three shares are trading at or above their respective initial level on a quarterly observation date. In that case, the conditional coupon accrued up to that point becomes payable in addition to the coupon that is already guaranteed. If the condition is met after just the first three months, for instance, this would deliver the 3.6% guaranteed coupon alongside the additional 3.6% conditional coupon. The barrier stands at 50% of the initial level and is monitored continuously. The comparatively large risk buffer and the high coupon prospect make this structure particularly interesting for investors who are confident the three underlyings have further potential, but do not necessarily want to be reliant on significant rises in share prices for an attractive return.<\/p>\n\n
The return on the second basket is only slightly lower. However, it comprises three companies \u2013 Cicor, Sensirion and SKAN \u2013 which stand to benefit from long-term growth sectors such as electronics, sensor technology, medical technology and biopharmaceutical production. The guaranteed coupon here is 10% p.a., or 2.5 % per quarter. The second memory coupon linked to an autocall also delivers 10% p.a. The autocall threshold is again 100% of the respective initial level, while the continuously monitored barrier is set at 55%. This makes an appealing prospect for investors: sideways movements or limited falls do not prevent the guaranteed payments. If, on the other hand, all three shares are rising sufficiently by a subsequent observation date at the latest, the accumulated second coupon can also be paid out and the product will end early.<\/p>\n\n
The third double coupon autocall, on EFG International, Implenia and mobilezone, comes with a guaranteed coupon of 8.2% p.a., or 2.05% per quarter. The conditional memory coupon offers another 8.2% p.a. The risk buffer for the trio stands at 40%. With all three products, however, it is important to note that the attractive coupons are no substitute for a capital guarantee. If at least one underlying breaches the barrier and there is no early repayment, the repayment is governed by the stock with the worst performance. Investors must therefore factor in corresponding losses or delivery of the weakest underlying asset. For those who take a generally positive view of the nine Swiss small and mid caps, however, and who also think that markets are likely to tread water, double coupon autocalls offer an interesting alternative to direct investment: the second tier of the stock market does not necessarily have to take off for a good return to be generated. If it does move up, though, there is the prospect of a second coupon.<\/p>\n\n
We look forward to answering all of your questions about our products and how they are traded. Please don't hesitate to get in touch! Phone: 058 800 11 11<\/a>, email info@leonteq.com<\/a> or contact us here<\/a>.\n<\/p>\n <\/div>","url":"swiss-equity-market","investmentThemeVerticalImageUrl":"https://structuredproducts-ch.leonteq.com/product-news/sidenav-banner/SMI_BlueChips_Leonteq-Structured-Products_Sidenav%20Banner.jpg","thumbnailUrl":"https://structuredproducts-ch.leonteq.com/product-news/thumbnail/SMI_BlueChips_Leonteq-Structured-Products_Thumbnail.jpg"}