Financial globalization isn't just a catchy headline; it truly makes financial instruments available to millions of savers that, until recently, were exclusive to institutions or the very wealthy. Two leaders in the stock market, UBS Warburg and Renta 4, explain how.
Driven by its innovative spirit, UBS Warburg is launching Certificates without maturity to complement its issue of 120 Warrants that are also listed on the market.
Certificates are stock market-listed securities that exactly replicate the performance of an index.
This means that they allow investment in international markets through securities traded in Spain, always denominated in Euros.
They do not expire, thus avoiding transaction costs known as roll-over, etc.
In that sense, they are perpetual titles.
They allow the investor the possibility of having a diversified and reduced investment with low administrative costs.
It is a simple and efficient product since they are securities listed on the Madrid and Barcelona Stock Exchanges.
What advantages do they offer at first glance?
– This is an absolute novelty in the Spanish Stock Exchange as it has no expiration date, so no transaction costs (roll-over) will be incurred.
– They have absolute transparency and ease of assessment: The Certificate guarantees the evolution of the reference index.
– This is the perfect alternative to an Equity Investment Fund or a Futures contract.
– Low operating costs: they do not involve a security deposit or anything similar.
– Highly accessible due to reduced barriers to entry for individual investors. All Certificates have a divisor of 100.
– It is a very attractive instrument that allows for international diversification in a simple and efficient way.
– They allow investment in international markets through securities traded in Spain, always denominated in Euros.
– For tax purposes, pending a ruling from the Tax Authority, these are considered, in principle, as Investment Income, and losses can be offset against other income of a similar nature (such as employment income, for example). They are very advantageous during recessions and depend on each taxpayer's marginal tax rate.
How is its price calculated?
Let's imagine that the IBEX 35 is trading at 8.482 and the Eurostoxx50 at 3.727.
And the ratio in both cases is 1/100
The Certificate calculation is performed by multiplying the index by the ratio, and the Certificate price is 84,74 / 84,82 in the case of the IBEX and 37,17 / 37,27 in the case of the Eurostoxx.
How do I buy/sell the 5 UBS Warburg Certificates?
Through your usual financial intermediary, you can buy/sell the 5 Certificates that are currently issued: IBEX 35, EUROSTOXX50, DAX, S&P 500 and NEMAX.
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