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Banks want to fulfill dreams of investors

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FRANKFURT. Without a capital guarantee private investors put no more money in new certificates. Bonus papers are risky because of the volatility of stock prices, discount stores only limited protection against price losses. New certificates with guaranteed payouts to facilitate gradual investors now entering into the equity markets.

"Enter low and sell at the highest price" – the investors dream is the all-time high fulfill Index Certificate on the Euro Stoxx 50 indices (ISIN DE000HV5AEL3) of the Hypo-Vereinsbank (HVB), almost. "Because it automatically saves them 86 percent of the highest monthly balance" is in the product description.

During the four years duration observed in the Issuer on each trading day last month the closing of the EuroStoxx-50. You will always lays down a new payment as soon as the underlying rises above a specified threshold. At a price check, the certificate can thus avoid losses. However, stock prices rise more, it pays only limited benefit.

Certificate does not make a loss

For the first time, HVB put the state in the EuroStoxx-50 31 Down in October 2008. Soon after reaching the first gain stage, the index fell, however – until March 2009 to 1 800 points. Index investors had not made losses. Owner of the index certificate could sit out the price setback, for the first gain stage is guaranteed.

Since then the Euro Stoxx-50 rises again and the all-time high-certificate can set new highs. By the end of November the index was around eight percent in the black. The HVB certificate but benefited only 6.88 percent in value. Because participation is 86 percent. More than six percent annual return is not in there so far, despite the all-time high structure. A mock currently costs around 99.31 euros.

Financing for the backup mechanism of lock-in allowances and many similar products by the limited participation in the gain or with retained dividends. How is the Euro-Stoxx-50 index as the best structure for such certificates. For the score of the Europe index is determined without the dividend payments of its basket of members.

Peak due dividends

Quite a restriction on capital gains waived a certificate structure of Goldman Sachs, the Hi-Score Certificate on the EuroStoxx 50 indices (ISIN DE000GS2BLC8) retains only the dividends of the shares in the index: "The mechanism peak funded through dividend payments," said Jochen Fishermen from Goldman Sachs is why the structure is also not applicable to all underlying securities.

The bank also issued certificates to some German defaults. The trade experts estimate the future dividends of the underlying assets, and they discount from the present time. "For 2010 we are likely to default values in the Euro Stoxx 50 with similarly high dividends, such as 2009," says Fischer. Only on the German blue-chip index itself, the certificates make less sense, since the Dax expects all its members dividends in the index development.