Equity Yield Certificate

The broadbased, worlwide, economic growth in a still very accomodative liquidity environment fueled by central banks explain easily the current bull market. It becomes increasingly difficult to spot attractive valuations in the equity markets. Market participants are heavily invested in the stocks and cannot stand being passive observers of the current rally.

Lock on profits at current levels

Companies show at this stage of this cycle record profit margins, and a record debt gearing as well. Without any timing skills on the foreseable economic downside, we nevertheless do fear about the tappering program of the central banks.

Unattractive equity performances in 2018

We expect a lateral consolidation for next year, performance being delivered mainly with dividend yields. A cautious stance toward stocks is highly recommended.

Equity Yield Certificate

We strongly favor returns based on dividend yields and coupons offered by attractively priced Barrier Reverse Convertibles through an actively managed certificate. Our model portfolio will hold high dividend yielding companies with share price potential, Barrier Reverse Convertibles on high dividend yielding companies (fiscal efficiency), and, selectively, short selling of put options on quality stocks hurt by the markets.

This is not a recommendation but just our opinion. Please consult with your financial advisor before investing!

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