Your cash has potential. Use it.

Your cash has potential. Use it.

22 April 2016Reading time: 3 minutes

There are certain selected products that could help you harness the potential of your cash holdings. The array of options is continually changing, so it's worth keeping a regular eye on developments!

It’s not getting any easier for investors to find investments that offer returns but are conservative in nature nonetheless. Longer-term government bonds with good credit ratings are beset by negative interest rates, for example, while even bonds of solid companies are offering meagre yields.

Many investors are stockpiling cash and holding off from investing. The question preying on their minds when will our banks start with the broad-scale introduction of negative interest rates on short-term savings deposits? Holding out for a turnaround in the trend doesn't appear to be worthwhile, however, since the capital market is anticipating negative CHF interest rates of -0.25% in the 3-month segment through to the end of 2021 (source: Bloomberg, 12.04.2016).

Against this backdrop, the following Vontobel investment products with reduced risk may be suitable as liquid investments:

 

(Callable) Multi Defender VONTIs with low barrier

  • Reduced price risk of underlying compared with direct investments; high safety buffer thanks to low barrier.
  • Guaranteed and attractive coupon.
  • The nominal value is repaid as long as the underlyings do not touch their barriers during the barrier monitoring period (see termsheet). However, if at least one of the underlyings has touched its barrier during barrier monitoring and at least one of the underlyings closes below its strike price at final fixing, the stock with the poorest performance is delivered or a cash compensation corresponding to the final fixing price of this underlying is paid (unless early redemption has been made in full).
  • Callable feature: On each monitoring date, Vontobel as the issuer has the right to terminate the (Callable) Multi Defender Vonti and repay on the next coupon payment date. The redemption is made at the nominal value, plus the (most recent) coupon.

 

 

 

Multi VONTIs with low exercise price: either buy the stock cheaper or simply profit from a good coupon

  • It is possible for shares to be appealing but too expensively valued at that given moment. Equity investors would often happily buy certain stocks but at a (much) lower price.
  • The Multi Vonti with low exercise price is suitable for conservative investors who would in principle like to buy each of the stocks at a lower price (compared with the price at initial fixing), giving them a favourable entry opportunity.
  • If all of the equities are above the low strike price at final fixing, the nominal value is repaid in full and none of the underlyings are delivered. The investor receives the annual coupon in any event (unless early redemption has been made in full).
  • If physical delivery takes place, this may result in a loss (in terms of value) if the coupon payments made are insufficient to balance out the difference between the low strike price and the lower final fixing price of the stock.
  • Callable-Feature: On each monitoring date, Vontobel as the issuer has the right to terminate the (Callable) Multi Vonti and repay on the next coupon payment date. The redemption is made at the nominal value, plus the (final) coupon.

 

Harness the Swiss real estate market's potential to remain robust

  • The massive appreciation of the CHF and the resultant turbulence in 2015 had no direct impact on Swiss real estate stocks, with income and costs being predominantly 'home-grown'. Accordingly, these stocks put in a robust showing.
  • The VONCERT Open End on the "Swiss Property Equities" basket gives investors virtually 100% participation in the basket's potential share price gains or losses.
  • The basket contains the shares of six leading Swiss real estate firms.
  • Annual distributions: An annual compensation payment is defined to offset any dividend payments received.

 

COSI® Credit Linked Notes: fixed coupons with 100% capital protection

14/12/2019 13:06:32

 

Write a Comment

 

  

 

  

 

* Required fields need to be filled in