Vontobel has quoted on the SeDeX 8 new Memory Cash Collects on worst of stock basket belonging to diversified sectors, such as automotive, defense and aerospace, luxury, entertainment, tourism, Italian banks and companies listed on Piazza Affari.
The new products have a Barrier at maturity at 50% or 60%, monthly premiums between 0.85% and 1.20% with a Memory Effect and Autocall level from the twelfth month at 100% of the Initial Reference Price. The most interesting feature of these products is that the Bonus threshold for the first year is 10%, while it is equal to the Barrier for the remaining 2 years. During the first year of the product’s life, therefore, the investor will collect the expected monthly premiums up to 90% of the underlyings.
The scenarios at the dates of there are three intermediate evaluations. If all the underlyings, starting from the twelfth month of the product’s life, are equal to or higher than the Autocall Level, the product terminates early and the investor receives the nominal value in addition to the premium for the period and any premiums in memory. If, on the other hand, all the underlyings are equal to or greater than the Bonus Threshold, the investor receives the premium for the period and any bonuses in memory and the investment continues. Finally, if at least one of the underlyings is below the Bonus Threshold, the investor does not receive the premium, which is kept in memory, and the investment continues.
The scenarios on the other hand, at maturity there are two. If all underlyings are at or above the Barrier, the investor receives the nominal value plus the premium for the period and any premiums in memory. Otherwise, if at least one of the underlyings is below the Barrier, the investor receives an amount commensurate with the negative performance of the underlying with the worst performance, with the corresponding loss on the capital invested.
Jacopo Fiaschini, Flow Products Distribution Italy manager commented: “These new products allow the investor to take a position on baskets that range from the most diverse sectors of the economy. Furthermore, they have the particularity of a Bonus Threshold which for the first year is equal to 10%, which allows you to collect the premiums even with decreases in the underlying securities of up to 90%, a defensive feature useful in this market phase “.