In the middle of 2019 Swissquote expanded its "Themes Trading" series with an interesting benchmark when the broker launched the Swissquote Global Recycling Index. At the same time, Leonteq made it possible to invest in the new index with a tracker certificate (SIX symbol: RECYTQ). A good two and a half years later, it can safely be said that the idea of the Swissquote equity experts has paid off, with the structured product trading at well over 50% above the issue price. That means the index can boast an outperformance of almost 20 percentage points on the global equity market as measured by the MSCI® World Index. One minor shortcoming of the issue at the time was its term, the tracker certificate maturing in June 2023. As this future theme is likely to have lost little of its relevance since then, Leonteq and Swissquote have decided on a "reinforcement" at an early stage.
A tracker certificate on the Swissquote Global Recycling Index 2.0 was listed on the SIX a short while ago. This new issue is an open-end product. Nothing has changed as regards the investment calculation. "The opportunities associated with global waste management are unparalleled," the experts at Swissquote are convinced. They point to the increase in waste quantities that goes hand in hand with population growth. In the recycling industry especially, many businesses are investing in innovative technologies that will enhance recycling solutions. "As an investment, global recycling can be considered an essential service," the analysts add. The shares of the sector could therefore ride out periods of market volatility relatively unscathed. This is also a genuine investment in sustainability With an exposure to global recycling, according to the initiators, investors are taking a socially responsible decision that they can feel great about.
Management Fee: 1.10% p.a.
Index Sponsor: Swissquote Bank SA
Issuer: Leonteq Securities AG, Guernsey
Guarantor: PostFinance AG, Bern, Switzerland
Like the original benchmark, the Swissquote Global Recycling Index 2.0 also concentrates on the big players within the sector. The entire value chain is covered: in addition to recycling, waste management and treatment as well as other associated environmental services are included. At present 17 companies have made it through the selection process, in which the shares also have to meet minimum trading criteria. US industry representatives set the tone. Headquartered in Houston, Waste Management characterises itself as the largest service provider for the waste management industry in North America. Alongside the transport and disposal of garbage, the large cap's spectrum also includes recycling and a renewable energy line. In addition to this all-rounder, the index also contains a raft of US service providers specialising in certain materials. Schnitzer Steel handles the recycling of scrap and vehicles. Founded in 1906, the company supplies the scrap metal obtained to foundries and rolling mills across the world or uses it to manufacture new steel products itself. In the USA and Canada Schnitzer also trades in used car parts.
The six European members of the Swissquote Global Recycling Index 2.0 also include a Swiss company. Vetropack Holding is a leading manufacturer of glass packaging in Europe. The Bülach-based company has been actively engaged in recycling since as far back as the 1970s, when Vetropack built a recycling system for waste glass in Switzerland. "Glass is a natural substance and 100% recyclable without suffering any loss of quality," the company states on its website. Waste glass has consequently become the most important raw material in the production of new packaging, with an average share of 60%. The Vetropack share price came under intense pressure in the most recent stock market sell-off. One possible reason could be the company's Ukrainian plant. These tragic events do not change the fact that the Swiss small cap fits perfectly into the Swissquote Global Recycling Index 2.0. And, thanks to the broad base of this benchmark, other components are more than able to cushion the impact of the downward movement of such outliers.
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