Vontobel will be including Bear Capped Bonus Certificates in its offering on deritrade. These can offer investors attractive yields – particularly in a downward trend but also in sideways or slightly upward trending markets.
In addition to the classic Bonus Certificates, Vontobel is expanding its product offering on deritrade to include Bear Capped Bonus Certificates. Underlying assets include indices as well as the shares of numerous international companies.
Bear Capped Bonus Certificates are particularly suited for investors who, although they are expecting negative price developments for the underlying asset, do not want to completely exclude stagnating – or even moderately rising – prices over a defined time period.
Potential instrument for stabilizing portfolios
In contrast to classic equity positions (long positions), using short positions in the form of Bear Capped Bonus Certificates can make a tactical contribution to stabilizing a portfolio. Particularly when the Bear Capped Bonus Certificates are based on indices, they can have a valuable influence on the portfolio as a whole in a negative market environment, since the price development of the Bear Capped Bonus Certificates is contrary to the price development of the underlying.
It should be noted that positive participation in a decline of the underlying’s price is fully reflected only at maturity. Due to the countervailing influence of volatility, the product may stagnate in the secondary market if the underlying asset is losing value. This makes this product type suitable for “buy” and “hold”.
Example of a Bear Capped Bonus Certificate on DAX