Characteristics
Structured products (certificates) are designed to respond to the investors’ desire for solutions that simultaneously:
- Protect the invested funds against loss (whole or partial) and
- Provide exposure to capital markets with the opportunity to benefit from positive market performance.
The certificates are financial instruments where the issuer undertakes the obligation to pay amounts depending on the predetermined terms of the product, including possible capital protection and potential yield at maturity.
The structured products (certificates) are denominated in EUR or USD with a fixed maturity date and partial or full protection of the nominal value at maturity depending on the terms of the specific issue and in the absence of an event related to the insolvency of the issuer. Each issue will be offered with a fixed subscription period.
Benefits
Full or Conditional Capital Protection
IconProducts with full protection of the nominal value at maturity, depending on the terms of the specific issue and in the absence of an event related to the insolvency of the issuer, are available for conservative investors aiming to preserve their savings. Structures with conditional capital protection depending on the terms of the specific issue are offered to investors willing to take higher risk in pursuit of higher yield potential.
Underlying assets
IconThe underlying asset may vary within the structure of each product, e.g. stock market indices (EURO STOXX 50, S&P 500, MSCI World, etc.), company stocks, commodities and raw materials (gold, oil, etc.), currency pairs, interest rate indices (Euribor, ESTR, etc.), a basket of assets, etc.
Term
IconUp to 7 years: the certificates are suitable for both short-term and long-term investment horizons.
Yield
IconCertificates may offer returns above those currently available from conservative investment instruments, while the yield depends on the terms of the specific product and the performance of the underlying assets. Depending on the specific structure of the product, fixed annual payments may be accrued and paid, or a yield based on the performance of the underlying asset, or additional income payable at the maturity of the product.
Liquidity
IconThe structured investment products owned by the clients may be sold before maturity, while their pricing is determined by a Bank from the UniCredit Bank GmbH Group, which is the manufacturer of the investment products. Redemption quotes are published on the specified website at www.onemarkets.bg.
What is the difference between certificates and bonds, and stocks?
When investing in bonds, the investor typically receives a predetermined yield, and when holding the investment until maturity, the investor relies on repayment of the nominal value of the investment, depending on the terms of the issue. This makes bonds a preferred instrument for investors seeking better predictability.
Investments in stocks and investment funds provide the opportunity for higher yield, but are also associated with the risk of losing part of or the entire invested amount due to market fluctuations.
Structured products (certificates) combine elements of both approaches. Depending on the specific structure, they can provide:
- Full or conditional protection of the capital at maturity;
- Participation in the performance of financial markets through underlying assets such as indices, stocks or commodities;
- Predefined payout conditions;
- Fixed investment period.
Unlike stocks, certificates do not provide a share of ownership in a company and do not entitle investors to dividends. Unlike bonds, their yield is not fixed in advance, but depends on the fulfilment of certain conditions and the performance of the underlying asset.
Thus, certificates represent an investment solution that combines the opportunity for capital protection with potential yield under clearly defined conditions and terms.
Underlying risks
The risks associated with investments in structured products (certificates) vary depending on the parameters of the specific structure and may include:
- Credit risk – risk of issuer default or insolvency (certificates are not guaranteed by the BDIF)
- Risk of capital loss – if the principal is not 100% protected
- Liquidity risk – if the repurchase price before maturity is not fixed
- Market risk – profitability may depend on the performance of the underlying asset
- Currency risk – if the certificate is in a foreign currency
- Tax risk – from withholding tax depending on the investor or changes in tax treatment. The Bank does not provide tax advice.
- Complexity risk – products may contain complex payout mechanisms and conditional terms that are not always easy for the investor to understand
More information
Each issue of structured products has its own ISIN number generated by the issuer on the grounds of an approved base prospectus.
The base prospectuses drawn up by UniCredit SpA are approved by the Commission de Surveillance du Secteur Financier (CSSF), Luxembourg, and those issued by UniCredit Bank AG are approved by the Federal Financial Services Authority (BaFin), Germany.
For each issue of a structured product with an ISIN offered in Bulgaria, the relevant Key Information Document (KID) is published in Bulgarian on the website www.onemarkets.bg, where information and all documents related to the respective products are available.
The Key Information Document valid for all countries where a Structured financial product is offered specifies the collection of an additional premium, apart from the nominal value premium - agio.
In this regard, under the provision of Article 50 of COMMISSION DELEGATED REGULATION (EU) 2017/565 of 25 April 2016, we inform you that the Bank, in its capacity as a distributor of the structured financial instrument, receives remuneration that constitutes an expense for the investor and is included in the price of the product, as follows: a fixed fee, as well as a product distribution fee depending on the type and structure of the structured financial instrument.
The Bank may receive additional intangible benefits from the originator of the issue, UniCredit Bank GmbH, for the purposes of improving the professional qualifications of the employees involved in the distribution of the structured financial instrument.
The above information is for illustrative purposes only and does not constitute advice for transactions with financial instruments. It is deemed that each investor makes its own decision to invest or make other transactions with structured products. UniCredit Bulbank AD does not provide investment advice.
