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Currency Hedging

Intus Currency Hedging Service is intended for Euro investors who would like to benefit on the higher returns currently available for investment products in US Dollar (USD) and UK Pound Sterling (GBP) but not to take any currency risk. If you, as an Euro investor, would like to invest in USD Intus will cover for you the currency risk between the start and maturity date of the chosen investment product. In case the exchange rate of EUR would have fallen towards USD at the maturity date we will pay the currency loss to you. This includes also the coupons or dividends received during the investment term.

Typical investment products which offer good returns in USD and GBP but not in EUR are various Capital Protected Investment Products with 5-7 years investment term. These products are issued by major international banks with high credit ratings. Intus Brokers, our affiliate Group company, has a large selection of Capital Protected Products in their offering. You can find more details here.

EXAMPLE HOW THE CURRENCY HEDGING AGREEMENT WORKS:

CAPITAL PROTECTED NOTE, USD DENOMINATED

Issuer: A+ rated major European bank (S&P)

Performance linked to: Performance of four European Bank Stocks

Quarterly coupon payable: 4% (20% on annual level), possible non-paid coupons are memorized

Coupon trigger: when all four stock prices are on any quarterly observation date minimum 95% of their start levels

Maximum return: 100% in 5 years term

Capital Protection: 100% when all the four stock prices are at the maturity minimum 50% of their start levels; if not then capital is repaid according to the weakest performed stock

Autocall trigger: Product autocalls (capital and coupons are paid out) when all four stock prices are on any quarterly observation date minimum 95% of their start levels

Liquidity: daily liquidity at market price

Subscription fee: 0%

Amount to be invested: 10,000 EUR (11,750 USD)

Exchange rate at inception: 1 EUR = 1.175 USD

Currency Hedging fee: 1% for whole 5 years term (100 EUR/117.50 USD)

  1. Assumed performance 20% after 12 month / Return from investment 2,350 USD
  2. Assumed performance 100% after 5 years /Return from investment 11,750 USD

FOLLOWING IS AN EXAMPLE FOR TOTAL RETURN (CAPITAL + COUPONS) FOR EURO INVESTOR WHEN EUR/USD EXCHANGE RATE AFTER 12 MONTHS OR AT MATURITY IS

5% better than at inception (EUR has become stronger towards USD): 

  1. 11,900.00 EUR (19% per annum)
  2. 19,900.00 EUR (19.80% per annum)

5% better than at inception (USD has become stronger towards EUR): 

  1. 12,495.00 EUR (24.95% per annum)
  2. 20,895.00 EUR (21.79% per annum)
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