Certificates - explained!

Certificates are securities that relate to one or more underlying assets such as: Shares or a share index and can be equipped with a protection mechanism to meet the investors' need for security.

The invested capital can be fully or partially protected against price losses. With certificates it is also possible to profit from sideways-trending and conditionally falling prices - the stock markets do not have to rise in order to generate returns. These are the advantages of certificates compared to direct investments such as shares or ETFs: Shares or ETFs (exchange-traded index funds).

Certificates offer precisely traceable payout profiles and thus have a clear and transparent mode of operation. Certificates also make it possible to invest easily and flexibly in a theme-oriented manner - for example in sustainability or future themes such as artificial intelligence and renewable energy.

Our most popular certificates have broadly diversified share indices as underlyings. Since an index combines the overall performance of many shares, the market risk of individual shares and sectors is automatically reduced with certificates on broad indices. Our products can be traded at the current buy or sell price during trading hours and therefore offer you full flexibility. Certificates can be purchased both through your personal bank advisor at your house bank and conveniently online. Even small amounts are possible. Some start with just a few euros, while some certificate types require a minimum investment of 1,000 euros. Another new option is to save with certificates - you can start with 100 euros per month.

As with all securities, investing in certificates also involves risks. Certificates are a special form of bond - known in the trade as bearer bonds. This means that the bank (also called the issuer) that issues the certificate is liable for repayment. There is therefore the fundamental risk that the issuer is not or only partially able to meet its payment obligation from the certificate - due to insolvency (issuer risk) or possible official orders ("bail-in"). In these cases, there may be a total loss of the capital invested.

Furthermore, the choice of certificate type is decisive for the possible risk of loss. The name says it all: capital protection certificates are a good choice for safety-oriented investors to protect up to 100% of the invested capital at maturity. If you are willing to take a little more risk and get a higher return, you are in good hands with partial protection certificates. And there are also suitable certificates for particularly risk-averse investors in the form of leverage products.

Basically, we differentiate certificates into three categories depending on the investor's risk appetite: Capital Protection Certificates, partial protection products and leverage products.

Investment products with Capital Protection →

Capital Protection Certificates are particularly suitable for an entry into the world of securities. In short, you can protect your invested capital up to 100 per cent at maturity and still have the opportunity to profit from opportunities on the stock market. The term is usually longer than with other products, which is why they are well suited for asset accumulation.

Investment Products without Capital Protection →

These include bonus, express and discount certificates as well as reverse convertibles. What they all have in common is that they are suitable for short- to medium-term investors and are less risky than a direct investment in the underlying. Investment products without capital protection also include index and participation certificates, which move one-to-one with the market and therefore also have market risk. Our experts explain here how different they are and what added value they bring to the portfolio.

Leverage Products →

Leverage Products are suitable for investors with extensive capital market experience. They make it possible to participate disproportionately in the price movements of the underlying asset even with a small investment - both upwards and downwards. They are therefore suitable for investors who are willing to take risks, as a total loss of the investment is possible even if the price of the underlying asset moves slightly in the opposite direction.

In our knowledge section we have compiled further information →