BNP Paribas makes available on the SeDeX market of Borsa Italiana a new series of Top Bonus Certificates on indices and shares of leading national and international listed companies, expiring in June and December 2023 and potential returns between 7% and 23%. In particular, BNP Paribas has launched a total of 18 Top Bonus Certificates, 5 on indices and 13 on shares of leading Italian and foreign listed companies.
The most interesting aspect of this issue is the maturity in June and December 2023, which meets the needs of investors of protection and return over a short-term time horizon. Against a maturity of one year, the new Top Bonuses offer potential returns of between 7% and 23%. One of the characteristics of these certificates is in fact that of “monetizing volatility”; when it is high, as in this period, it allows to issue products with very deep barriers, ensuring a “buffer” with respect to possible further drops in prices of up to 40%.
The Top Bonuses allow you to optimize the portfolio with respect to direct investment in shares or indices. Furthermore, they allow to obtain a Bonus if at the expiry of the Certificate the underlying has not reached a value equal to or lower than the Barrier. In fact, it is possible to earn even in the event of moderate declines of the underlying shares, between 60% and 80% of the initial value depending on the selected product.
If, on the other hand, the barrier event occurs at expiration, the Certificate does not pay the Bonus, but an amount proportionate to the actual performance of the underlying. In this case, there is a loss of the capital invested commensurate with the negative performance of the underlying.
The differences from the classic Bonus Caps
The Top Bonuses differ from the classic Bonus Caps for monitoring the barrier only at maturity: the barrier is not required to remain inviolate throughout the life of the certificate, but it is sufficient for the underlying to recover this level by the final valuation date. The barrier option observed only at maturity naturally reduces the risksince the probability of a breakout is limited to a single observation date: if the underlying falls below the barrier, but then recovers by the deadline, the yield would be intact.
Top Bonus Certificates are aimed at an investor who believes that a certain stock or index can maintain a “lateral” trend during the life period of the certificate, that is, within a certain range. In this case, at maturity, the investor earns the bonus, i.e. obtains a fixed return on his investment. For these characteristics, even savers from a bond market with yields that are now very low, if not negative, but who do not yet feel prepared to invest directly in equity markets, characterized by a higher level of risk, use the Top Bonuses.
Even more than other Certificates, which are born to be held until expiration, the Top Bonuses they are well suited to be sold even during the life of the productwhen the price of the Bonus approaches the Cap: precisely to make this type of operation even more efficient, BNP Paribas has decided to further reduce the spreads (the difference between the bid and the ask price), which for Top Bonuses is just 50 basis points for equities, even dropping to 30 basis points for some indices.
Below is the list of new products issued on the SeDeX market of Borsa Italiana.
More information on BNP Paribas’ Top Bonus Certificate range can be found at investimenti.bnpparibas.it/certificates-investimento/bonus-certificate