USD S&P 500 Autocall Closing date: 14 September 2020 Take - - PowerPoint PPT Presentation
USD S&P 500 Autocall Closing date: 14 September 2020 Take advantage of exposure to attractive returns in USD with a high degree of capital protection for your clients 1 Investec USD S&P 500 Autocall overview An investment product
Take advantage of exposure to attractive returns in USD with a high degree of capital protection for your clients
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An investment product designed to provide investors with an attractive return in US Dollars even if the S&P500 Index makes
investment term.
Payoff profile Backtesting and performance Investment information Distributor information
Investec USD S&P 500 Autocall
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Investec USD S&P 500 Autocall
Payoff profile Backtesting and performance Investment information Distributor information
Term to maturity five years, with
in year three or four Growth 8.00% pa cumulative enhanced return in USD (settled in ZAR) linked to S&P 500 Index Capital protection 100% capital protection in USD provided the index does not end below 60% of initial index level Credit reference entity Credit linked to Royal Bank of Scotland Group PLC Listing and liquidity Listed on the JSE. Daily liquidity with 0.5% bid-mid spread Minimum investment Minimum investment of R100 000 and increments of R1 000 thereafter
Opportunities
Performance is linked to the S&P 500 Index, consisting of 500 blue-chip stocks listed in the
The Investec USD S&P 500 Autocall provides investors exposure to US equity markets in US
Investors have downside protection in USD for a drop of up to 40% in the S&P 500 Index. Following a drop of more than 40%, the investor will participate in the index one-for-one
All fees are already factored into the payoff of the Autocall. As such, if an investor invests R100 000, they will receive R100 000 exposure
Risks
Investors take credit risk on Investec Bank Limited as the issuing entity, as well as Royal Bank of Scotland PLC as the credit reference entity
Investors will receive no dividends in the Autocall. This investment is not suitable for an investor who wishes to receive regular income
Investors will not participate in any outperformance
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Investec USD S&P 500 Autocall
Payoff profile Backtesting and performance Investment information Distributor information
S&P 500 Index Data
Market Capitalization USD 2,216.14bn Weighting Free-Float Market Cap Cap Factor n/a Number of Constituents 500 Listing All constituents listed in USA Currency USD Inception Date 26 September 1997
Information Technology 25% Health Care 15%
Financials 11% Communication 11% Consumer Discretionary 10%
Industrials 8% Consumer Staples 8% Utilities 4% Real Estate 3% Energy 3% Materials 2%
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Payoff profile Investec USD S&P 500 Autocall
Backtesting and performance Investment information Distributor information
Two opportunities to call before maturity If the Index is equal to or above initial Index level on automatic call date in year three or four Capital at risk Capital is at risk if the Index ends down more than 40% at maturity. The Investor will then participate in the Index one-for one Capped cumulative upside E.g. If the Index is equal to or above initial Index level on year three, investor earns 3 x 8.00% = 24.00%, regardless of the outperformance of the Index Trade Date Initial Index Level 100% Barrier Level 60% Year 3 Call Year 4 Call Year 5 - Maturity Capital + 3 x enhanced return Capital + 5 x enhanced return Capital returned Capital Loss
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Payoff profile Investec USD S&P 500 Autocall
Backtesting and performance Investment information Distributor information
Currency exposure Investor has exposure to US equity market in US Dollars through the product. The product is cash settled in Rands
Below table shows the effect of the Dollar Rand conversion rate at expiry as well as the returns received in USD
Autocall Expiry Initial Investment Converted to USD at R16.50 Index Return * Autocall Autocall Return in USD Investment Return in USD Settled in Rand at R18 Settled in Rand at R15 Year 3 R100 000.00 $6 060.60
Year 3 R100 000.00 $6 060.60 10%Automatic Call 24% $7 515.14 R135 272.59 R112 727.16 Year 4 R100 000.00 $6 060.60
Year 4 R100 000.00 $6 060.60 20%Automatic Call 32% $7 999.99 R143 999.86 R119 999.88 Year 5 R100 000.00 $6 060.60
0% $6 060.60 R109 090.80 R90 909.00 Year 5 R100 000.00 $6 060.60 25%Automatic Call 40% $8 484.84 R152 727.12 R127 272.60 Year 5 R100 000.00 $6 060.60
$3 515.15 R63 272.66 R52 727.22 * Assumed returns for illustrative purposes
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Investec USD S&P 500 Autocall
Payoff profile Backtesting and performance Investment information Distributor information
Backtested performance
In 70% of daily observations dating back to 2000, investors would have received a return on the first opportunity to call in year three equating to a return of 24% in USD. Historically, investors would have never breached the loss barrier, i.e worst case scenario, investors received their capital back. *
*Past performance is not indicative of future performance.
0% 19% 7% 4% 70%
0% 10% 20% 30% 40% 50% 60% 70% 80%
Loss incurred Did not call Autocall year 5 Autocall year 4 Autocall year 3
0.00% 20.00% 40.00% 60.00% 80.00% 100.00% 120.00%
03/01/2005 03/01/2007 03/01/2009 03/01/2011 03/01/2013 03/01/2015 03/01/2017 03/01/2019
Average S&P 500 Index Return Autocall Return
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Investec USD S&P 500 Autocall
Payoff profile Investment information Backtesting and performance Distributor information
Closing date 14 September 2020 Trade date 21 September 2020 Listing date 26 September 2020 Maturity date 21 September 2025
Tax implications
The information provided in this brochure is general information and should not be construed as tax advice. It is recommended that prospective investors seek independent professional legal, tax and accounting advice and consider the investment in the light of the Investor’s particular circumstances. No responsibility is accepted by IBL for the treatment of any court of law, tax, banking or other authority in any jurisdiction of the investment and no undertaking, warranty or representation is given with regard to the outcome of any such investment.
Credit risks
As the Investec USD S&P 500 Autocall is credit linked to the reference entity, should a Credit Event (bankruptcy, failure to pay, obligation default, repudiation/moratorium, government intervention and restructuring) occur in respect of the issuer or reference entity, the return would be reduced in accordance with the recovery ratio. If a credit event occurs in respect of the credit reference entity, on or before the maturity date, the return due to the Investor will then be equal to the market value of the Autocall multiplied by the adjusted recovery price, which will be payable on the Maturity Date. This reduced return will earn interest at the overnight SAFEX rate, from the date upon which it is determined that the Credit Event occurs, until the scheduled Maturity Date. The debt represents general, unsecured, senior, contractual obligations of the Issuer and Credit Reference Entity.
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Investec USD S&P 500 Autocall
Distributor information Backtesting and performance Investment information Payoff profile
Distributor fee
1.25% upfront distribution fee
Annual fee
0.75% annual distribution fee in year two and three
Stockbroking account
Investor needs a stockbroking account to invest
Fees
Financial advisors receive a fee of 1.25% (incl VAT), paid by IBL, as well as 0.75% (incl VAT) in year two and year three. This fee is built into the cost of the Autocall and the investor will have 100%
Please note that all fees are denominated in US Dollars converted to Rands.
Distributor Licenses
The investment manager/ financial advisor is required to be authorized to provide financial services in the following products/subcategories in order to sell this product: Category I 1.24 Structured Deposits or 1.11 Warrants, Certificates and other instruments Category II 2.18 Structured Deposits or 2.8 Warrants, Certificates and other instruments
How to invest
All investors must hold a stock broking account at a stock broking institution. Distributors
to SPSupport@investec.co.za
invested amount Distributors should note that no payments will be received by IBL and that all settlement will take place via stockbroking accounts on a delivery versus payment basis
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Investec USD S&P 500 Autocall
Distributor information Backtesting and performance Investment information Payoff profile
Brian McMillan +27 11 291 3180 brian.mcmillan@investec.co.za Japie Lubbe +27 21 416 3307 japie.lubbe@investec.co.za Aneeqah Samie +27 11 263 5203 aneeqah.samie@investec.co.za Andri Joubert +27 21 416 3679 andri.joubert@investec.co.za Sonia Lynch +27 11 286 9450 sonia.lynch@investec.co.za
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Investec USD S&P 500 Autocall
Distributor information Backtesting and performance Investment information Payoff profile
This document is not a prospectus, nor does it constitute an offer to the public in respect of the Investec Equity Structured Products. Completion and signature of the Application Form contained herein constitutes an offer to invest in the Investec Autocall, implementation of which is subject to acceptance of the signed Application Form by Investec. Investors should seek their own independent professional advice regarding the suitability of this Autocall for their own particular investment purposes. The information contained in this communication is for informative purposes and is not intended to constitute advice in any form, including but not limited to investment, accounting, tax, legal or regulatory advice. As product supplier, Investec is not in a position to have regard to the specific investment objectives, financial situation or particular needs of any specific recipient. The material is based upon information that we consider to be reliable, but we do not represent that it is accurate or complete, and it should not be relied upon as such. All illustrations, forecasts or hypothetical data are for illustrative purposes only and are not guaranteed. The sender accepts no liability whatsoever for any loss or damage of any kind arising out of the use of all or any part of this communication. Investec does not make representation that the information provided is appropriate for use in all jurisdictions or by all investors or other potential investors. Parties are therefore responsible for compliance with applicable local laws and regulations. Prospective investors should be fully aware of the risks involved in trading investment related products. Profits and benefits are dependent on the performance of underlying assets and other variable market factors and are not guaranteed. This product is not sponsored, endorsed, sold, or promoted by the Index or indices, as specified herein, or the relevant Index sponsor, being the corporation or other entity that (a) is responsible for setting and reviewing the rules and procedures and the methods of calculation and adjustments, if any, related to the relevant Index and (b) announces (directly or through an agent) the level of the relevant Index on a regular basis. No Index sponsor makes any representation whatsoever, whether express or implied, either as to the results to be obtained from the use of the Index and/or the levels at which the Index stands at any particular time on any particular date or
purchasing or assuming any risk in connection with entering into any transaction in respect of this product. Neither Investec nor the Investor shall have any liability to the
indices from publicly available sources it believes reliable, it will not independently verify this information. Accordingly, no representation, warranty or undertaking (express
Investec Corporate and Institutional Banking, a division of Investec Bank Limited. Reg. No. 1969/004763/06. An Authorised Financial Services Provider (FSP 11750) and registered Credit Provider (NCRCP9). A member of the Investec Group.
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