In historical comparison, stocks with high dividend yields show smaller fluctuation ranges than the overall market. That is why long-term investors with the desire for the highest possible security often invest in high-dividend stocks. To reduce the risk of being directly invested in one or more shares, it is advisable to invest in a broad share index, such as the STOXX® Global Select Dividend 100 EUR Price Index (ISIN: US26063V1180). This stock index, designed as a price index, currently contains 40 high-dividend stocks from the USA / Canada and 30 stocks from Europe and Asia / Australia.
For investors who want to reduce the risk of investing directly in the index, but who generally expect the price of high-dividend stocks to rise in the next few years, the RCB capital protection certificate currently available for subscription dividend shares Bond 90% II could be interesting.
90% capital guarantee and 32% earnings opportunity
The closing price of the STOXX® Global Select Dividend 100 EUR Price Index on August 25, 20 will act as the starting value for the dividend bond 90% II. In eight years, on August 23, 2018, the current index level will be compared with the starting value.
If the index is positive on that day compared to the starting value, the certificate is repaid at 132 percent of the starting value. This 32 percent total gross return will correspond to an annual gross return of 3.5 percent. If the index is less than ten percent lower than the starting value on that day, the certificate will be repaid at 100 percent of the issue price.
A capital loss will only occur if the index lost more than ten percent of its starting value on August 23, 2018. However, the partial guarantee of this certificate will limit the maximum risk of loss to ten percent, since the certificate will be repaid with a capital protection of 90 percent even if the index falls by 60 percent.
The RCB certificate dividend shares Bond 90% II, ISIN: AT0000A2HQF6, due on August 29, 2018, can still be subscribed until August 24, 20 in denominations of 1,000 euros with 100 percent.
CertificatesReport conclusion: The dividend bond 90% II offers the chance of a gross return of 32 percent in eight years with a slight increase in the index and reduces the risk of loss of the direct index investment to ten percent.
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