The Nasdaq-100® is a capitalization-weighted stock index that includes the 100 largest companies listed on the Nasdaq stock exchange (excluding financial companies). Currently, the technology sector has the highest weighting in the index with more than 50%, followed by the service sector (over 20%) and the healthcare sector (over 10%). Due to the overweighting of these growing sectors, the Nasdaq-100® index was able to recover quickly from the coronavirus crisis and the index rose by more than 70% from its year’s low in March to a new all-time high of almost 12,000 points (as of August 26, 2020).
For investors who believe in a continuation of the rally in the next 5 years, but also for those who expect a price correction, Raiffeisen Centrobank issues the USD Nasdaq-100® Twin Win certificate with the chance of a yield on both rising and falling index prices.
On the initial valuation date, the closing price of the Nasdaq-100® index will be fixed as the starting value and the barrier (50% of the starting value) will be determined. During the observation period, the daily closing prices of the index are compared with the barrier. As long as the index does not close 50% or more below its starting value on any day during the observation period, the payout will be effected at the end of the term according to the "Twin Win" mechanism:
- Any positive performance of the index up to the cap of +35% compared to the starting value is paid out at the end of the term 1:1 in addition to the nominal amount.
- A negative performance of the index down to the barrier will also be converted into profit at the end of the term 1:1 and paid in addition to the nominal amount, given that the barrier was never violated.
What happens if the barrier was violated?
If the barrier was touched or undercut at least once during the term and the closing price of the index on the final valuation date is below the cap of 35%, the redemption at maturity is effected according to the index development.
If the closing price of the index at the end of the term is at or above the cap of 135 % despite a previous barrier breach, redemption will be effected at the maximum amount of USD 1,350 per nominal amount. This means, investors do not participate in price increases of the index beyond the cap.
The certificate USD Nasdaq-100® Twin Win quotes in USD. If the cash flows from the certificate are subsequently converted into another currency, additional risks as well as opportunities arise from possible exchange rate fluctuations.
The issue price amounts to 100% (nominal value USD 1,000) within the subscription period. Further information as well as the Key Information Document can be found on the product page.
Bonus Certificates – explained shortly:
For any additional information you may require do not hesitate to contact us on +43 1 515 20-484.
The Team Structured Products of Raiffeisen Centrobank