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 are characterized by a so-called barrier that protects the bonus, as long as it is not breached. In this article, we will take a closer look at the Sachwertanleihe 3 Notes, which was issued on 7/1/2022 with a duration of 767 days. Furthermore, we will examine the underlying asset, Telekia Compartment 1 ().

What Are Bonus Certificates?

Bonus Certificates are structured investment products that enable investors to participate in the price gains of an underlying asset and simultaneously receive a bonus payment if certain conditions are met. These conditions usually include not falling below a certain barrier during the lifetime of the certificate. 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 Sachwertanleihe 3 Notes

The Sachwertanleihe 3 Notes was issued on 7/1/2022 and has a duration of 767 days. During this period, the price of the underlying asset, Telekia Compartment 1 (), is observed. As long as the price does not fall below the predetermined barrier, the investor receives a bonus payment in addition to the performance of the underlying asset upon maturity. If the barrier is breached, the bonus is forfeited and the investor only participates in the performance of the base value.

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 allow investors to participate in the price gains of the underlying asset.

Risk Reduction: The barrier provides a certain 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 forfeited and the investor only participates in the performance of the base value.

Issuer Risk: The risk that the issuer of the certificate becomes insolvent cannot be ruled out. Investors should therefore carefully evaluate the creditworthiness of the issuer.

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