Bonus certificates offer interesting return potential
Private banking clients of Tatra banka who invested in fourteen primary issues of bonus certificates issued by Raiffeisen Centrobank AG could, on average, achieve a return of more than 10% p.a.* as at 31 July 2013.
A bonus certificate is a financial instrument that offers the opportunity to invest funds usually in one of the blue chip stock indices, without hedging the principal. Investors can achieve the predefined bonus return at maturity, provided that the value of the stock index does not reach the barrier or lower value during the term.
The theme of the aforementioned fourteen bonus certificate emissions was inflation, or the development of the EURO STOXX 50® index, respectively, and they were issued by Raiffeisen Centrobank AG exclusively for the private banking clients of Tatra banka.
The attractiveness of bonus certificates is also evidenced by a high rate of sales. Most popular with clients are bonus certificates that use the Best Entry mechanism. This concept is very effective and simple. Certificate holders know in advance the return that will be achieved under the predefined terms. Best Entry mechanism allows the investor to set the barrier automatically more conveniently, as its value decreases if the value of the stock index drops during the Best Entry period. The result is a more conservative investment that becomes safer, while still maintaining its return potential.
In the first seven months of this year, this opportunity was seized by a large number of clients, with almost EUR 70 million total sales volume of bonus certificates issued by Raiffeisen Centrobank AG. This opportunity continues to be open to all Tatra banka private banking clients.
* Source: Raiffeisen Centrobank AG
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