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Market Comment: 90% capital protected structured note USD-Oil is the new gold for 2021?


USD, 150% return, Worst of Basket, 3 years on PetroChina Company Ltd, Royal Dutch Shell and Chevron Corporation

By Rebecca Ellis

THUR 13 MAY, 2021-theGBJournal-  Who is this product for? Investors who wish to receive a capital appreciation from a basket of Blue-Chip Oil companies.

Investors who wish to protect their capital up to 90%.

Investors who wish to invest in a medium duration product.

Investors who believe the selected equities will go up during the lifetime of the product.

Why follow this idea?

Covid-19 caused the halt of the real economy and the emergence of the stay-at-home economy stocks in 2020. The world is gradually easing out of lock-downs due to strong inoculations programs, especially in the US, UK & UAE.

However, the road is bumpy and with the new 4th wave hitting certain parts of the world oil stocks are still at depressed levels versus pre-pandemic times. With this ongoing uncertainty, we expect prices to not fully recover until the end of the year. Afterwards with pent up demand and focus for infrastructure government projects, we would expect these stocks to make 20% or more in the three-year period.

How does it work?

-The capital is 90% guaranteed as long as the bank issuer does not go bankrupt.

-The product pays a return of 150% of the worst performing equity in the basket.

-The product is designed to be invested for 3 years.

-The product can be sold in the secondary market at any time of the product lifetime, and we will expect to exit it after 1 year if the strong appreciation emerges as anticipated.

-The capital loss cannot exceed 10%.

-At maturity, there are two options:

-The equities are negative, the capital is repaid at 90%

-The worst performing equity is positive, and you receive 150% of the performance as a return.

Rebecca Ellis is a Personal investment advisor, based in Zurich–rebecca.ellis@pomonawealth.com| pascal.crepin@pomonawealth.com

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