vontobel webinaari osa 2 - knock-out warrantit

Leistung schafft Vertrauen

Knock-Out Warrants Open End?

How to invest in

31 May 2016

Heiko Geiger,

Bank Vontobel Europe AG

Important legal information

This presentation serves solely to provide you with information and does not constitute a solicitation or offer by Bank Vontobel

Europe AG, Frankfurt am Main branch (referred to collectively with affiliates as "Vontobel"), to purchase or sell securities. The

information provided to you in this presentation does not constitute financial analysis and also does not satisfy the statutory

requirements for ensuring the unbiased nature of financial analysis; nor is such information subject to a ban on trading prior to the

publication of financial analyses.

The information included in this presentation does not constitute any investment, tax or other advisory service. Such information

does not take into account your specific situation as regards to your investment targets and risk appetite. Such information does not

replace the advice by your bank or any other tax or financial adviser which is essential in each individual case prior to taking any

purchasing decision.

In order to receive detailed information pertaining in particular to the structure and the risks associated with an investment in the

securities, you should read the relevant base prospectus which, in addition to the final terms and any supplements to the base

prospectus, is published on the webpages of the Issuer (https://certificates.vontobel.com) and which is obtainable free of charge

from the Issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany. Investors are

requested to comply with the applicable selling restrictions.

Historical price performance is not a reliable indicator of future price performance of the underlying or the securities. Note that the

payment of tax, commissions and fees may have a negative impact on the return of investment.

Not all structured products issued by the Issuer are suitable or appropriate for an investment by an interested investor. The purchase

of such securities may be linked to risks. It is strongly recommended to seek for independent advice by tax or financial advisers as

well as distribution partners prior to taking any purchasing decision.

The reproduction, distribution, modification or any other use of this presentation (in full or in part) without the written consent of

Vontobel is prohibited.

Publisher: Bank Vontobel Europe AG, Frankfurt am Main branch, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany.

Copyright© 2016 Vontobel. All rights reserved.

Seite 2

https://certificates.vontobel.com/







Vontobel – Performance creates trust

Presentation of the Vontobel Group

Trading short trends with Knock-Out Warrants?

How to select interesting Knock-Out Warrants

Comparison: Knock-Out Warrants vs Bull & Bear Certificates

Seite 3

Vontobel specialises in asset management for private clients and institutional

investors as well as in investment banking.

Founded in 1924

90 years of entrepreneurial independence

Still family-run via majority shareholding

Listed on the SIX Swiss Exchange since 1986

Headquarter in Zurich, 21 locations worldwide

Around 1.400 employees

Moody‘s rating Aa3 (long-term deposit rating Bank Vontobel AG)

Three divisions: Private Banking, Asset Management, Investment Banking

Key figures:*

- Total client assets: CHF 187,2 bn

- Equity: CHF 1,40 bn

- CET1 capital ratio: 17,9%

- Dividend per share CHF 1,85 for 2016

Vontobel in brief

Global investment advisor with a long tradition and strong capital base

*as of 30 June 2015

10 September 2015

Slide 4

Our core capabilities

1. Protect and build wealth

3. Deliver tailor-made investment solutions

2. Manage assets actively

We take a long term approach in protecting and building the wealth, our clients

have entrusted to us. In doing so, we provide our clients with responsible and

forward-looking advice, transcending generations.

We implement tailor-made investment solutions for our clients. Additionally our

products and processes are based on the latest forward-looking research.

As active asset manager, we provide financial added value for our clients and

develop first-class solutions for return optimisation and risk management.

10 September 2015

Slide 5






Seite 6

Seite 7

Trading short- and mid-term with Knock-Out Warrants

Participating on clear market trends

Opportunity to participate on price increases as well as decreases

of various underlyings (Call or Put)

Fast way to react on company‘s data and also on economic

developments (e.g. oil price, currencies, economic figures)

Use volatility of capital markets

Due to linear leveraged participation, also possbile to trade mid-

term time frame

Flexible instrument for day trading as well as hedging and risk

management of longer term strategies

Seite 8 Seite 8

Categorization of Leverage Products

Leverage Products

Warrants Knock-Out Products

Mini Futures (Open End) Knock-Out Warrants

Open End Limited

Bull&Bear Certificates

Seite 9

Leverage Products: Opportunities & Risks

Disproportional losses (Leverage

Effect)

Total loss if barrier is reached

Issuer risk

No current income (e.g. dividends,

coupons)

Disproportional gains (Leverage

Effect)

Yields in increasing or decreasing

markets

Open End allows mid-term and

long-term investments

Tailor made leverage portfolio

position for every risk / return

profile

No volatile influence on pricing

Opportunities Risks

Facts Investors must keep in mind

Knock-Out leads to total loss

Consider currency risk (e.g. underlying in USD, product in EUR)

Consider Knock-Out hours of underlying (especially gold and oil)

Have the ratio in mind while hedging your portfolio

Seite 10

Seite 11

Characteristics

Call

Strike < Rate

Price of Call Knock-Out

((Price of Underlying – Strike) / Ratio

Price of Put Knock-Out

((Strike – Price of Underlying) / Ratio

Leverage of Knock-Out

(Price of Underlying / Price of Knock-Out Warrant) / Ratio

Strike = Knock-Out Barrier

Opend End

Ratio

Leverage

Put

Strike > Rate






Seite 12

Seite 13

How to select Knock-Out Warrants?

- Investment Term!

- Underlying?

- Expectations Call or Put?

Seite 14 Seite 14

Nokia is a major communications and IT company

5.5 bn EUR turnover in Q1 2016

2.47 bn EUR net profit in 2015

104,000 employees

Nokia serves customer in over 100 countries across the world.

Despite a negative balance sheet Nokia sold its mobile phone section to Microsoft

and will focus on grid expansion

New comeback of Nokia could be imminent – Nokia bought the French consumer

electronic company, Withings, specialized in wearables and data evaluation

Investment Idea: Nokia OYJ

Example: T LONG NOKI V31 (DE000VS0GXZ8)

Seite 15

Source: Bloomberg, www.vontobel-zertifikate.de *Date: 31.05.2016

Knock Out Warrants are financial products, which involve a high degree of risk. Past performance is not a guide to future performance and should not be the sole factor of

consideration when selecting a product. Returns can as a consequence of fluctuations in exchange rates, raise or drop. Of importance are the respective prospectuses which are

attainable from the issuer: Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, DE-60323 Frankfurt am Main, Germany, as well as from https://certificates.vontobel.com .

T LONG NOKI V31

ISIN: DE000VS0GXZ8

Type: Call

Strike: EUR 3,7949

Knock-Out-Barrier: EUR 3,7949

(Distance*: 25,34%)

Leverage: 3,80

Duration: Open End

Ratio: 1:1

Nokia*: EUR 5,12

Ask*: EUR 1,33

Time

Nokia share(EUR)

0

1

2

3

4

5

6

7

8

02.05.2011 02.05.2012 02.05.2013 02.05.2014 02.05.2015 02.05.2016

Strike / KO

Example: T LONG NOKI V31 (DE000VS0GXZ8

0

2

4

6

8

Tag Monat Jahr Autor, Version Seite 16

T LONG NOKI V31

Source: Bloomberg, www.vontobel-zertifikate.de *Date: 31.05.2016

Knock Out Warrants are financial products, which involve a high degree of risk. Past performance is not a guide to future performance and should not be the sole factor of

consideration when selecting a product. Returns can as a consequence of fluctuations in exchange rates, raise or drop. Of importance are the respective prospectuses which are

attainable from the issuer: Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, DE-60323 Frankfurt am Main, Germany, as well as from https://certificates.vontobel.com .

ISIN: DE000VS0GXZ8

Type: Call

Strike: EUR 3,7949

Knock-Out-Barrier: EUR 3,7949

(Distance*: 25,34%)

Leverage: 3,80

Duration: Open End

Ratio: 1:1

Nokia*: EUR 5,12

Ask*: EUR 1,33

Strike / KO

Seite 17

Underlying

Direction

Strike

How to choose a Knock-Out Warrant

Seite 18

Underlying

Direction

Strike

How to choose a Knock-Out Warrant

T LONG NOKI V31

Performance of Knock-Out Warrants

Seite 19

Term: Open End

Ratio: 1:1

Ask: 1,33 EUR

Nokia Share: 5,12 EUR

Leverage: 3,80

Strike / KO: 3,7949 EUR

Product characteristics Price:

((6,00 – 3,7949) / 1) = 2,2051 €**

Leverage:

((6,00/2,2051) / 1) = 3,7949

Price: ((4 – 3,7949) / 1) = 0,2051 €**

Leverage:

((4/0,2051) / 1) = 19,50

Shares rise to EUR 6

Shares drop to EUR 4

*Date: 31.05.2016, **Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. Please notice that in case of an investment

in this product , the investor is not entitled to receive dividend. The Products are not capital protected, under certain circumstances you may sustain a total loss of investment. Investors bear the

credit risk of the issuer.






Seite 20

Investors can participate disproportionately on stable (positive or negative) price trends

Special strengths in stable trends

Although they offer opportunities for disproportionately high gains, the leverage works in both

directions and can also result in disproportionately heavy losses

Bull & Bear certificates – Investing with a constant leverage

Seite 21

Characteristics of Bull & Bear certificates

Optimally harness stable price trends without

a fixed expiry

In normal market phases nearly no impact on

the pricing of the factor certificate due to

volatility

Constant leverage over the product’s lifetime

and a transparent structure due to the

underlying factor index

Application scenarios:

Not suitable for an alternately

rising and falling trend -> sideways

markets

Rising market trend:

Bull certificate (Long)

Declining market trend:

Bear certificate(Short)

Performance DAX vs Turbo & Bull & Bear Period of 6 weeks & detailed view of 10 days

Bull certificate offers much greater return possibilities to investors than a direct investment.

However, the leverage works both ways and heavy losses may occur.

Short-term investment product to take part disproportionately of a stable trend

Quelle: Bloomberg, 17.05.2016

Past performance is not a guide to future performance and should not be the sole factor of consideration when selecting a product. Please notice that in case of an investment in this product , the

investor is not entitled to receive dividend. The Products are not capital protected, under certain circumstances you may sustain a total loss of investment. Investors bear the credit risk of the issuer.

60

80

100

120

140

160

180

DAX Index

BULL DAX X10

Turbo DAX x5

Turbo DAX x10

60

80

100

120

140

160

180

200

220

How to Hedge your Portfolio with Put Knock-out Warrants

Folie 23

Knock-out Warrants can hedge your Portfolio

EURO STOXX 50 value is 3.000 and portfolio value is 60.000 €

EURO STOXX 50 falls 1 % or 30 points

Portfolio constitution has to be similar with the EURO STOXX 50

Required amount of Put Knock-out Warrants

60.000

= 2.000 contracts

3.000 / 100

Value of the portfolio is about 20*EURO STOXX 50

1 EURO STOXX 50 point = 20 Euro

EURO STOXX 50 fell 1%, then without hedging Portfolio‘s

value decrease by:

- 600€ (30 points * 20 €)

Put Knock-out Warrants raises 0,01 EUR , when EURO

STOXX 50 drops 1 point :

+ 600€ (2000* (0.01 € * 30 points))

Seite 24

Bull & Bear Certificates vs Knock-Out Warrants

Bull & Bear Certificates Knock-Out Warrants

Benefits from stable (positive or negative) price

trends

Constant leverage (factor) over the product‘s

lifetime

In normal market phases Volatility does not

have an impact on the pricing of the certificate

No knock-out: only built-in barrier allowing for

an intraday adjustment

The leverage works both ways (also if performance

takes a direction contrary to the market

expectation)

The barrier cannot be seen as a buffer, since it

can only mitigate further losses

The leverage works both ways (also if performance

takes a direction contrary to the market expectation)

Knock-Out drive to a total loss of the invested capital.

Possibility to generate disproportional returns

Open-End products (e.g.: Mini-future) or limited term

product available (e.g.: Warrants)

Increased volatility drive to increased premium

(Warrants)

Invest in increasing or decreasing Markets.

Bull & Bear Matrix

Tag Monat Jahr Autor, Version Seite 25

Bank Vontobel Europe AG

Frankfurt am Main

Bockenheimer Landstr. 24

60323 Frankfurt am Main

Germany

www.certificates.vontobel.com/FI/FI

Thank you for your attention and interest!

Heiko Geiger

Head of Public Distribution Europe

0800 91 77 91 (phone)

[email protected] (mail)

Seite 26

vontobel webinaari osa 2 - knock-out warrantit

Economy & Finance