One thing is clear: every investor wants their portfolio to go forwards, not backwards. In view of the large number of imponderables and the latest price corrections, that is far from a simple task at the moment. This is precisely where a new product from Leonteq comes into play. A well thought-out structure allows attractive returns to be achieved in an environment that is characterised by high inflation, a weak economy and geopolitical risks. We are talking of a bonus certificate with capital protection. This investment skilfully brings two asset classes together: on the one side a guaranteed return, as is the case with bonds, and on the other the theoretically unlimited upside potential of shares.
The structure of the product is as simple as it is effective. As usual, the bonus level defined at the time of issue holds out the prospect of a particular return. Provided no barrier is breached, this minimum interest rate is also guaranteed. A bonus certificate with capital protection, though, also has a second relevant element, namely the capital protection level. This means that the investment does not end in negative territory even in the case of a barrier event. If the capital protection level is actually above 100%, as in this scenario, a positive return is guaranteed. Whatever the case, the repayment corresponds to the capital protection level. For the new issue this is 103%, while the bonus level is fixed at 106%.
The domestic SMI heavyweight trio Nestlé, Novartis and Roche were selected as the basis for the new issue. Should this high-carat basket of shares perform well, even more than the bonus level is achievable. If the weakest member of the trio climbs above the bonus level, the product enjoys a participation rate of 100% – based on the bonus level of 106% – in the performance of this stock, and with no limit.
To sum up, the bonus certificate with capital protection guarantees a positive return in every eventuality. If the basket of shares rises modestly - the weakest underlying is above the barrier (100%) but below the bonus bonus level (106%) - the nominal attracts an interest rate of 6%. Should the three SMI giants not perform particularly well and the weakest underlying is below the barrier (100%), the capital protection level is activated, so that the product ends 3 years with a return of 3%. If, on the other hand, the equity environment picks up again in the next few months and the three appreciate tangibly, the product has unlimited upside potential. That means the bonus certificate with capital protection on Nestlé, Novartis and Roche puts investors in the ideal position to capitalise on every conceivable development.
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, email info@leonteq.com or contact us here.