Even though investment products with very high safety buffers cannot completely neutralize the risk of capital losses, these have established themselves as a suitable alternative to interest-free forms of investment such as government bonds. As with all forms of investment, the following also applies here: the higher the return opportunities, the higher the risks and vice versa.
The Bonus & Safety Certificates brought onto the market by RCB at regular intervals, such as the Europe / USA Bonus & Safety Certificate (ISIN: AT0000A2JTZ4), appeal primarily to investors with a high level of risk awareness due to the more than 50 percent safety buffer. The Europe / USA Bonus & Security Certificate currently offered for subscription on the EuroStoxx50 (ISIN: EU0009658145) and S & P500 index (ISIN: US78378X1072) appeals to investors with a very high level of risk awareness who want to at least maintain the purchasing power of their capital investment in the next few years .
2.00% interest and 65% security
The closing prices of the stock indices determined on November 17th, 2020 will be set as starting values for the Bonus & Safety Certificate. The barriers that were activated during the entire observation period (18.11.20 to 12.11.25) will be found at 35 percent of the starting values. Regardless of how the index levels will move over the next five years and where they will be on November 12th, 25, investors will receive interest coupons of 2.00 percent on the annual interest dates, for the first time on November 18th, 21st.
If the indices are quoted above the respective barriers within the entire observation period, then the certificate will be redeemed on November 17th, 25 at the issue price of 100 percent. There is a risk of capital loss if one of the two index levels touches or falls below the barrier during the term and the index levels are below the starting values on the valuation date (12.11.25). In this case, the certificate will be redeemed with the performance of the index with the poorer performance.
The RCB 2.00% Europe / USA Bonus & Security Certificate, due on November 17th, 25, ISIN: AT0000A2KLD6, can be subscribed to in denominations of EUR 1,000 with 100 percent until November 16, 2020.
Report conclusion: Because of the high, 65 percent safety buffer, this certificate on the European EuroStoxx50 and the American S & P500 index appeals to investors for whom capital preservation is more important than optimizing returns. However, if one of the two indices falls by more than 65 percent, there is a risk of severe losses.
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