If the underlying closes at or above the reference price on the expiration date, you will benefit from an unlimited upside participation in the weighted performance of the underlying (please refer to the hypothetical example on page 2) plus coupon (if any).
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For clients in booking center Switzerland onlyEquity Buy on Dips Note
Participation
Underlying: Equity Index
In general, Equity Buy On Dips Notes allow you to participate in the performance of the underlying and get a potential regular coupon payment. Initially, the investment is partially allocated into the underlying and cash. The product will reallocate the exposure from cash into the underlying if pre-defined trigger levels are reached, enabling investors to take advantage of lower entry levels in a negative market environment provided that the underlying recovers all or part of its loss until expiry.
The payout profile is for illustrative purposes only and is based on the assumption that no exceptional cancellation will occur, in accordance with the issuer’s product documentation.
Main features of a sample product
Currency
USD, cash settled
Term
2 years
Return
Weighted performance of the underlying plus the coupons on the cash component (if any)
Participation
100% of absolute performance in the weighted performance of the underlying on the expiration date
Capital
No capital protection
You may consider an investment in this product, if
- You are familiar with both structured products and equity markets
- You intend to stay invested in this product until its redemption date
- You are aware that if the underlying moves downward until the expiration date, the capital is at risk
- You wish to be invested in the investment currency of the product. If your reference currency is not equal to the investment currency of the product, the return may increase or decrease in reference currency terms as a result of exchange rate fluctuations
Summary of main product-specific benefits
Summary of main product-specific risks
- Potential for unlimited upside participation in the weighted performance of the underlying on the expiration date
- Possibility to gradually build exposure to the underlying during the life of the product in case of a market correction
- Regular coupon payment on the cash component (if any)
Summary of main product-specific risks
- Should the third trigger level be touched, the further potential loss is similar to the loss of a direct investment in the underlying
- The coupon is only paid on the percentage of the investment amount not invested in the underlying (excluding the coupon)
- You are fully exposed to the default risk of the issuer
Table 1: Hypothetical Example (trigger event scenarios)
The following example is for illustrative purposes only.
| Trigger Event Date | Trigger Level | Closing level of underlying | Perf. of underlying since Pricing Date | Equity Component | Cash Component |
|---|---|---|---|---|---|
| Pricing Date | n/a. | 100% | n.a. | 40% | 60% |
| T+3 months | 90% | 89% | -11% | 60% (+20%) | 40% (-20%) |
| T+7 months | 85% | 83% | -17% | 80% (+20%) | 20% (-20%) |
| T+12 months | 80% | 79% | -21% | 100% (+20%) | 0% (-20%) |
Table 2: Return on investment (ROI) on the redemption date
Assumptions: Trigger events as shown in table 1 above; Coupon: 5.00% p.a.
| Final Index Level on the expiration date | ROI (redemption)* | |
|---|---|---|
| USD | Chg % | |
| 5’598.73 | +40.00% | 56.64% + Coupon (if any) |
| 5’198.82 | +30.00% | 45.45% + Coupon (if any) |
| 4’798.91 | +20.00% | 34.26% + Coupon (if any) |
| 4’399.00 | +10.00% | 23.07% + Coupon (if any) |
| 3’999.09 | 0.00% | 11.88% + Coupon (if any) |
| 3’599.18 | -10.00% | 0.70% + Coupon (if any) |
| 3’199.27 | -20.00% | -10.49% + Coupon (if any) |
| 2’799.36 | -30.00% | -21.68% + Coupon (if any) |
| 2’399.45 | -40.00% | -32.87% + Coupon (if any) |
| 1’999.55 | -50.00% | -44.06% + Coupon (if any) |
| *ROI calculations are based on the weighted performance of the underlying (see above) and are dependent on if and how many trigger events occurred. In this particular scenario analysis, under the provided hypothetical trigger event dates, the coupon would equal 1.83%. | ||