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 4-6 years investment term. These products are issued by major international banks with high credit ratings. We have 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 interest trigger: When all four stock prices are on any quarterly observation date minimum 95% of their initial 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 initial levels; if not then capital is repaid according to the weakest performed stock.
Autocall trigger: Product autocalls (is redeemed early and the capital and coupons are paid to the investor) when all four stock prices are on any quarterly observation date minimum 95% of their initial levels.
Liquidity: daily liquidity at market price.
Subscription fee: 0%
Amount to be invested: 10,000 EUR (10,700 USD)
Exchange rate at inception: 1 EUR = 1.07 USD
Currency Hedging fee: 2% for whole 5 years term (200 EUR)
- Assumed performance 20% after 12 month if the product autocalls then / Return from investment 2,000 EUR (plus capital 10,000 EUR).
- Assumed performance 100% after 5 years / Return from investment 10,000 EUR (plus capital 10,000 EUR).