Keeping risks under control
You have a low to moderate risk tolerance. And you’re looking for an investment that will preserve your capital while still offering attractive return opportunities in excess of the customary risk-free rate of return, as an alternative to a bond for example.
This category includes a whole range of different products. One thing they all have in common is payment of a predefined minimum amount at the end of the investment period, generally between 90% and 100% of the capital invested. In addition, there is a return component that can be structured in various ways. UBS offers capital protection products for almost the entire investment universe.
If your market expectations prove to be correct, you will secure a higher return than with a bond, for example.
Risks are comparatively low with capital protection products. Two things are important: first, the capital protection element applies at the end of the investment period only. If you need your capital earlier and sell the product before the end of the investment period, you might to have to accept a loss. Second, the choice of issuer quality is vital if you want to minimize issuer risks.
Key product types:
Capped CPN (Capital Protected Note)
CPN (Capital Protected Note)
CSUN (Callable Step-Up Notes)
CDRAN (Callable Daily Range Accrual Notes)
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