Structured Products

Multi bonus certificates are identical structures to bonus certificates, except that they are based upon several underlying assets and that the payoff is based upon the worst performing one. The name is somewhat misleading, as it suggests that the product is based on a basket, hence we will call them for what they are henceforth: worst-of bonus certificates. Indeed, an embedded worst-of option makes sure that if only one of the included assets breaks through the predefined barrier, the protection as well as the bonus are disabled.

There’s lots of talk about commodities, of the price of crude oil rising one day and falling the next, or how China is hoarding industrial metals like copper or aluminum, but few practical solutions an investor can rely on to efficiently invest in commodities.

Whatever the reason behind the nominal price variations, unbiased advice proposing real solutions about investing in commodities is even scarcer. Most of the time, bankers propose products that are based on the Goldman Sachs Commodity Index (GSCI), or the Dow Jones AIG index (DJAIG), both of which have changed ownership recently. Goldman sold the GSCI to S&P, who rebranded it S&PGSCI, and UBS bought the DJAIG and rebranded it DJUBS. Changing the name did not improve the performance of either index, as the investment methodology remained the same: through front-months investments, which is often a disadvantage for the investor.