In addition to the return opportunities and risks of a form of investment, the topic of “sustainability” is becoming increasingly important for investors. Since it is by no means easy for private investors to find shares that correspond to this topic, an investment in a share index compiled by experts that corresponds to the sustainability topic seems sensible.
The underlying instrument for the new RCB sustainability bonds is the STOXX Global ESG Leaders Select 50 Price Euro Index (ISIN: CH0298407260). This index contains 50 shares with a low fluctuation margin and high dividend payments. The maximum weighting of a share is limited to 10 percent of the index value. Only shares of companies that meet the inclusion criteria of ecological, social, and responsible action are included in the index. The index composition is reviewed at quarterly intervals and adjusted if necessary.
If you want to read more on the subject and to find more details about the STOXX Global ESG Leaders Select 50 Price Euro Index (ISIN: CH0298407260), download our companion app for free. With the Born2Invest mobile app you can find the latest business news in the world and stay on top of the market.
-10%, 0%, 12% or 24% return opportunity
The closing price of the STOXX Global ESG Leaders Select 50 Price Euro Index on 19.11.20 is set as the starting value for the Sustainability Bond 90% V (ISIN: AT0000A2K9J2). In eight years, on 15.11.28, the current index level will be compared with the starting value. If the index is at least 12 percent higher than the starting value on that day, the bond will be repaid at 124 percent (=2.7 percent per year) of the starting value. If the index is at least 100 percent, the redemption amount will be 112 percent (1.4 percent per year) of the issue price. If the index level on that day is less than ten percent negative, the certificate will be redeemed at the issue price of 100 percent. If the index falls more than ten percent below the issue price, the certificate will be redeemed at 90 percent of the issue price. Irrespective of the actual decline in the index, the maximum risk of loss of this certificate is ten percent.
-10% or 24% chance of return
The Sustainability Bond 90% VI (ISIN: AT0000A2K9H6) on the same index will already be repaid at 124 percent (=2.7 percent per year) if the index is listed above the starting value in eight years. If the index is below the starting value on the last valuation day (15.11.28), the certificate is repaid at 90 percent of the issue price. Both certificates can still be subscribed to until 18.11.20 in a denomination of $1,180 (€1,000) at 100 percent.
Certificate Report Conclusion:
The two sustainability bonds 90% enable in slightly different ways in the next eight years with a maximum risk of loss of ten percent even with a slight rise in the STOXX Global ESG Leaders Select 50 Price Euro Index annual gross yield opportunities of 1.4 and 2.7 percent.
DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.
This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.
First published in FinanzNachrichten.de, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.
Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.
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