Bonus Certificates

Bonus Certificates are structured financial products that offer investors the opportunity to participate in the price gains of an underlying asset and benefit from an additional bonus payment. These certificates feature a barrier that protects the bonus as long as it is not breached. In this article, we will take a closer look at the Reverse Capped Bonus-Zertifikat auf DAX, which was issued on 7/10/2024 and has a maturity of 237 days. We will also examine the underlying asset, DAX Performance Index (DE0008469008).

What are Bonus Certificates?

Bonus Certificates are structured investment products that allow investors to participate in the price gains of an underlying asset while simultaneously receiving a bonus payment if certain conditions are met. These conditions typically include the asset's price not falling below a specified barrier during the certificate's term. As long as the barrier is not breached, the investor receives the bonus and the value of the underlying asset upon maturity.

Functioning of the Reverse Capped Bonus-Zertifikat auf DAX

The Reverse Capped Bonus-Zertifikat auf DAX was issued on 7/10/2024 with a maturity of 237 days. During this term, the price of the underlying asset, DAX Performance Index (DE0008469008), is monitored. As long as the price does not fall below the predetermined barrier, the investor receives a bonus payment at maturity in addition to the performance of the underlying asset. If the barrier is breached, the bonus is lost, and the investor only participates in the performance of the underlying asset's price.

Advantages of Bonus Certificates

Bonus Payment: Investors benefit from an additional bonus payment as long as the barrier is not breached.

Participation in Price Gains: Bonus Certificates enable investors to participate in the price gains of the underlying asset.

Risk Reduction: The barrier offers a certain degree of protection against price losses as long as it is not breached.

Risks and Considerations

Despite the attractive features of Bonus Certificates, investors should also consider the associated risks and considerations:

Barrier Risk: If the barrier is breached during the term, the bonus is lost and the investor only participates in the price development of the underlying asset.

Issuer Risk: The risk of the certificate's issuer becoming insolvent cannot be ruled out. Investors should therefore carefully assess the issuer's creditworthiness.

Market Risk: The performance of the certificate is dependent on the development of the underlying asset, which can lead to unpredictable fluctuations.