The Swiss Derivative Awards were recently presented for the 15th time already. This time, though, the ceremony could not be held in public. In light of the coronavirus pandemic, the organisers from Derivative Partners honoured this year's nominees and winners in an online broadcast. This did not have any negative impact on the quality of this industry award, which is known beyond the borders of Switzerland. As ever, an expert jury led by Prof. Dr. Marc Oliver Rieger subjected the applications submitted by the issuers to close analysis and scrutiny. For the tenth time in a row, the committee presented Leonteq with the "Top Service" award. As well as this coveted trophy, the issuer was also delighted to win three other prizes, including victory in the "Best Index Product" category. Here the experts were particularly impressed by the tracker certificate on the Leonteq Multi Asset Index.
Speaking online to the two presenters, Manuel Dürr, Managing Director and Head of Public Solutions at Leonteq, summarised the idea behind the award-winning strategy succinctly: "Winners on the stock market often remain winners." The Leonteq Multi Asset Index implements a rule-based momentum strategy, with the decisive factors being the price trends in the following five asset classes: property, commodities (gold), equities, bonds and cash. According to Dürr, within this pool they looked for underlying stocks which were both efficient and available at low cost, making them attractive to investors. "That's how we arrived at the ETFs," he explained. They invest in the five exchange traded funds to be used in a recurring monthly allocation process. Preference is given to the ETFs that show the strongest performance on a historic comparison (twelve months). "That gives investors the best possible access to the various asset classes," Dürr explained.
Gold is setting the tone in the current index composition – the corresponding ETF has an 87.4% weighting (see chart). This high proportion is not surprising, given that the go-to currency in a crisis is precisely a sort of "asset of the hour". Taking a twelve-month view, gold has increased in value by more than one third. The safe haven reached a new all-time high of USD 1,943.93 on 27 July 2020, passing its previous best mark from autumn 2011. Property and equities are represented in the Leonteq Multi Asset Index at 6.5% and 6.1% respectively. "This indicates that the concept works and takes account of the coronavirus crisis," says Manuel Dürr of the current composition. The expert in structured products also points to the low costs of 75 basis points a year. "For that investors get to enjoy great diversification without constantly having to worry about the allocation," Dürr adds. That means the owners of the product are, if you like, on autopilot in the markets.
The performance generated has been impressive so far: the Leonteq Multi Asset Index is trading at around a quarter above the starting value fixed on 3 December 2018 (see chart). A few months later, Leonteq launched the tracker certificate on the momentum strategy that has now been honoured with the Swiss Derivative Award. A further product was added at the start of April 2020. The momentum strategy was expanded with an exposure to bitcoin through an actively managed certificate, or AMC in technical jargon. The basket underlying this tracker certificate dominates the Leonteq Multi Asset Index allocation. It is joined by the leading cryptocurrency, with bitcoin currently accounting for 2.9% of the underlying. The issue date has since proven to be well-timed, the AMC having appreciated by around 23% since the launch. Of course, the historic performance of both products is not a reliable indicator of their performance in the future. This notwithstanding, the momentum approach – with or without the addition of a cryptocurrency – offers investors an attractive opportunity to follow the motto of "The trend is your friend" systematically.
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.
