Certificates, how to beat inflation by focusing on weekly coupons: how they work – Corriere.it

Beat inflation with certificates. this is the objective of the Swiss issuer Leonteq, which has launched the first investment certificates with a weekly coupon on the market. The operation is similar to that of traditional autocallables (instruments that can expire in advance) with monthly or quarterly coupons, which have the advantage of offering the investor the possibility of collecting premiums on a weekly basis. Furthermore, the new Leonteq-branded certificates also benefit from the so-called memory effect, a feature which provides the possibility of recovering the coupons not collected due to the occurrence of certain conditions. Going into more detail, a first product of this type, among those created by Leonteq, has as underlying the shares of Goldman Sachs, Intesa Sanpaolo and Unicredit (Isin CH125734615) and pays weekly coupons of 0.3%, for a yield total which can reach up to 15.6% per year.

How does it work

In the face of a nominal value of the product of 1,000 euros, it is therefore possible to collect 3 euros on a weekly basis if the underlyings are above the respective barriers, which rise to over 12 euros on a monthly basis and 156 per year. The barriers are wide, as they are placed at 60% of the initial observation prices. The coupons, therefore, are paid provided that none of the three stocks has lost more than 40% from the initial observation prices. At the expiry date, if the early call (autocallable option) is not activated, the investor will have the possibility of obtaining the repayment of the capital and the payment of the last weekly coupon, plus any other coupon previously not detached (thanks to the memory effect ), provided that the underlyings are above 60% of the initial prices. Otherwise, a refund will be obtained equal to the nominal value less the highest percentage loss (the so-called worst of) recorded by the three underlying bank securities. The certificate issued by Leonteq tradable on Borsa Italiana (Euro TLX). The maximum life is three years, even if the early recall option is present (with monthly observation starting from 4 August 2023).