The ERSTE Future Invest Garant 95% 21-31 refers to the Solactive ERSTE Future Invest Index VC as underlying, has a fixed term of 10 years and will be redeemed on 01/02/2031 (maturity). During the term there is no interest payment and investors do not receive any other proceeds.
The redemption at maturity depends on the performance of the underlying. Redemption is at least 95.00 % of the nominal amount (minimum redemption amount). The participation on the positive performance of the underlying is uncapped.
Upon maturity the performance of the underlying is looked at: in case of a positive index performance investors receive this positive performance in addition to the nominal amount. In case of a negative performance, investors bear losses of up to -5.00 %. If the index performance is worse than -5.00 %, the capital protection applies and the bond is redeemed at 95.00 % of the nominal amount.
With the ERSTE Future Invest Garant 95 % bond investors have the opportunity to invest in 5 megatrends with just one product. These megatrends are:
- Health care
- Technology & innovation
- Environment & clean energy
- Emerging markets
The index that investors participate 1:1 with this bond is the Solactive ERSTE Future Invest Index VC. It invests in 10 exchange-traded investment funds (ETFs), which passively invest in recognized financial market indices and reflect them efficiently. An additional risk control controls the degree of investment of the ETF portfolio and a money market investment. The ETF portfolio consists of 7 megatrend equity funds and 3 bond funds on sustainable corporate and emerging market bonds.
In calm market phases, the index invests mainly in the ETF portfolio. In uncertain and turbulent times, it may be advisable to make the investment more defensive and increase the money market share. Therefore, the index automatically reduces the degree of investment in the ETF portfolio as its volatility rises above 7 %. As a result, the money market share will increase and the ETF portfolio will be proportionately reduced, which can reduce the risk. The extent of the automatic switching to the money market depends on the volatility. When the market calms down, the degree of investment is increased again accordingly.
Details on the index can be found at the website of the index provider Solactive AG: