Partially capital protected investment products     4/5/2020

The following two issues by Quilter International and BNP Paribas are valid for the current market conditions. However, as the market conditions are volatile, they will be repriced at the time of purchasing. Any gain will be given to the investor. If lower then the investor has the option to opt out.

 

Any interested investor should speak to our advisers on 25 820 541.

Features and mechanism of the two products

The two structured products have the following features:

  • Coupon mechanism:

If on a quarterly basis, the closing price of each underlying (S&P500, Euro Stoxx50, FTSE100) is greater or equal to 85% of their initial level, a coupon will be paid plus all previous missed coupons (memory effect). This coupon is at least 1.25% per quarter for the EUR, and at least 1.5% for the USD product. If this does not occur, then no coupon will be paid.

  • Autocall mechanism:

If on a quarterly basis at or after the 4th observation, the closing price of each underlying (S&P500, Euro Stoxx50, FTSE100) is greater or equal to 100% of their initial level, the note is automatically redeemed at 100%. Else, the note is still live.

  • Final redemption mechanism:

If at maturity, the closing price of each underlying is greater or equal to 50% of their initial level, the note is automatically redeemed at 100%. Else, a loss in capital will occur and the note will be redeemed at 100% plus the negative performance of the worst underlying.

  • They will provide a minimum of 5% (Euro) and 6% (USD) annual coupon (payment every quarter) for five years
  • From year 1 onwards, it can becomes autocallable (i.e. redeemed)
5Y Phoenix Snowball Worst-of on EURO STOXX 50®, FTSE100 and S&P 500® in EUR Quanto

Property5Y EUR Phoenix Memory with 1 year no autocall5Y USD Phoenix Memory with 1 year no autocall 
StructureMemory PhoenixMemory Phoenix
Maturity5 years5 Years
BasketWorst of (S&P500, Euro Stoxx50, FTSE100Worst of (S&P500, Euro Stoxx50, FTSE100
CurrencyEURUSD
Autocall trigger100%100%
ObservationQuarterly Quarterly
No autocall1 year (autocallable at or after the 4th observation)1 year (autocallable at or after the 4th observation)
Memory couponmin 1.25% (5% p.a)min 1.5% (6% p.a)
Coupon barrier85%85%
Capital barrier50% at maturity50% at maturity

Comparison to previous market drawdowns to ascertain the risk

The following graphs and table show the maximum drawdowns for the three indices during the COVID 19 pandemic and the 2008 crisis.  The article staying calm in a crisis shows additional drawdowns during other pandemics.

SX5EMaDrawDown
UKXMaxDrawdown
SPXmaxDrawdown

Max DrawdownUKX IndexSPX IndexSX5E Index
Covid 19 -34%-34%-38%
2008 crisis-47%-56%-59%

The value of investments and the income from them can decline, you may not get back what you invest.