Commerzbank has expanded its range of listed products in the Netherlands with two AEX Garantie Certificates (guarantee certificates), both with a term of 21 months, which protect 87.5% and 92.5%, respectively, of the nominal invested. Until now Commerzbank has always looked at products already successful in the Germany market when introducing new products in the Netherlands, however, the guarantee certificates have been specifically created for the Dutch market, according to Christophe Cox (pictured), vice president, public distribution Belgium and the Netherlands, equity markets & commodities, Commerzbank.
"We now have a range of different product types [for investors in the Netherlands]," said Cox. "There are the leverage products, including turbos, warrants and factors. Then we have the tracker products, the factors 100% [which] follow an index or commodity or any other underlying, one-on-one. We also have investment products, the bonus, twin-win, rendement and discount certificates, and now we have added the guarantee certificates to our product range."
According to Cox, with the new capital protected products, Commerzbank is now able to offer investors a whole range of products on different underlyings that fit different visions, long/short, stability, different horizons (short or long term), "but also with different risk profiles, from dynamic to somewhat more defensive".
Guarantee certificates are part of the bank's more defensive minded products, according to Cox. "The investor gives up the dividend of the funds within the index for Commerzbank to be able to manufacture the guarantee structure," said Cox, adding that the product has a guaranteed minimum payout at maturity and, with a participation factor, investors can take advantage of the rise in the index. "In this case the AEX but our goal is to add other underlyings too in the coming weeks," said Cox.
Commerzbank can issue these guarantee certificates with different characteristics, different underlyings, different maturities, different protection levels, different participation factors, with or without cap, and so on, according to Cox. "This way the investor has the option to select a product which is the most suitable for his/her portfolio," said Cox. "The maturity depends on market conditions. Especially now, capital guarantee products are also attractive in terms of payout options because of the volatility, which is historically low at the moment. That's why we can now offer a reasonably high protection level combined with a short maturity."
According to Cox, Commerzbank is making sure investors are aware that there are investment products for different market conditions including high dividend yields with low volatility or high dividend yields with high volatility. "There are always products available to respond to certain market conditions," said Cox. "The payout options of bonus, rendement or twin-win certificates are slightly higher when there is high volatility while for guarantee certificates low volatility is more beneficial."
Since July 2016, Commerzbank has introduced five new product types in the Netherlands, according to SRP data. The products, 67 in total, include 55 bonus and capped bonus (rendement) certificates, six discount certificates, four twin-win certificates, and two guarantee certificates. Forty-six of the products are linked to either the AEX (19) or Eurostoxx 50 (27) index, while the remaining 21 products, predominately bonus and capped bonus certificates, are linked to Dutch shares.
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