Participation products

The area of Participation is covered by Tracker Certificates also known as UBS PERLES, UBS Exchange Traded Commodities (ETCs) or UBS Exchange Traded Trackers (ETT) . Tracker Certificates are suitable for investors with a medium to high risk preference who want to participate cost efficiently and unlimitedly in the price development of a single stock, a market or a market segment::

If the underlying increases, usually the price of the corresponding participation products increases as well. If the underlying falls, usually the price of the corresponding participation products falls as well. Often the participation products have no limited lifespan which is indicated by the suffix "Open End". In addition, the issuer risk must be taken into consideration with all participation products, since the capital invested could be lost if UBS AG becomes insolvent – irrespective of the performance of the underlying asset.



Overview

Tracker Certificate (1300)

Outperformance Certificate (1310)

Bonus Certificate (1320)

Bonus Outperformance Certificate (1330)

Twin-Win Certificate (1340)
 


 

UBS PERLES, UBS ETT, UBS ETC

SVSP: Tracker Certificate (1300)

Payoff diagramm UBS PERLES, UBS ETT, UBS ETC (Tracker Zertifikat)

UBS offers three types of Tracker Certificates: UBS PERLES, UBS ETT and UBS ETC are index certificates with which investors may participate in the performance of the underlying asset which can be a stock, an index, a currency pair, an interest rate or a commodity. UBS PERLES may be structured with or without a term limit. UBS PERLES without a term limit are identified with the addition "Open End" and are particularly suitable for long-term investors. Once bought, UBS Open End PERLES can be a long-term investment that does not require reinvestment.

Depending on the underlying asset, investors may use UBS Open End PERLES to participate, for example, in the upside potential of a broad equity market in a particular country (e.g. Switzerland, USA or China) or a whole region (e.g. Europe, Asia oder Latin america), easily, conveniently and with only one transaction. The potential fields of application go beyond this, however, as the respective index (or basket of stocks or indices) can be configured individually and thus also refer to specific topics (e.g. water, uranium or the BRIC countries), selected sectors (e.g. automobile, financials or pharmaceuticals) or investment styles (e.g. Small Caps, Mid Caps oder Blue Chips). The underlying index can track not only equities, but also other asset classes like bonds (e.g. credit-linked bonds), currencies or commodities.

You can find a more detailed product description of UBS PERLES in our brochure.

 

UBS ETTs (Exchange-Traded Trackers) refer to total return (TR) equity indices, so that any net dividends paid to the index members are automatically reinvested in the index. As a result, UBS ETTs let you participate in the total performance potential of the respective underlying index. In addition UBS ETTs do not have a term limit, they are especially suited for long-term equity investment. In general UBS ETTs do not incur management fees with the result that the underlying asset can be replicated 1:1. In exceptional circumstances, however, this general rule may be adjusted 2 years after launch of the UBS ETTs at the earliest, so a moderate management fee may be charged. Please therefore refer to the term sheet for the current fee structure.

You can find a more detailed product description of UBS ETT here.

 

As the name may suggest, UBS ETCs (Exchange-Traded Commodities) facilitate investment in a commodities index. Since most commodities are normally traded via futures contracts that have a predefined term, commodities indexes usually have to carry out regular roll transactions in order to permanently track the commodities price. Roll losses or roll gains may occur in this respect. UBS’ answer to this challenge are numerous UBS ETCs from the broadly based UBS Bloomberg CMCI Index family, which has a sophisticated roll concept to minimize roll losses. This means you can focus even more closely on the price behavior of commodities. Many UBS ETCs are not only offered in US dollars, but also on a currency-protected basis in Swiss Francs and Euros.

You can find a more detailed product description of UBS Bloomberg CMCI Indexfamily here.

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UBS Leveraged PERLES

SVSP: Outperformance Certificate (1310)

Payoff diagramm UBS Leveraged PERLES (Outperformance Zertifikat)

With UBS Leveraged PERLES, also known as outperformance certificates, you can apply leverage, since UBS Leveraged PERLES offer you the chance to participate disproportionately and without restriction in rising prices of the underlying asset (e.g. an equity, an index or a currency pair). This means that as of a predefined price level (the so-called strike level) participation in a potentially rising price performance is higher than 100%. The exact performance rate varies depending on the product features and is fixed per issue.

If the purchase price of a UBS Leveraged PERLES is at the price level of the underlying asset, the effect of the leverage effect does not come to fruition yet. In this case, the disproportionate chance of a gain is counteracted by a loss risk that is equivalent to a direct investment and investors participate in potential negative price developments to an equal extent as normal PERLES. In the described case (without agio) there is thus no disproportionate participation in potential losses.

To minimize the loss risk, UBS Leveraged PERLES Plus has conditional partial protection. As long as an additionally included safety threshold (kick-out level) is not reached during the term, you recoup at least the capital invested on the due date. The partial protection only ceases to apply if a threshold is breached and the product behaves like a normal UBS Leveraged PERLES as of the due date.

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UBS PERLES Plus

SVSP: Bonus Certificate (1320)

Payoff Diagramm UBS PERLES Plus (Bonus Zertifikat)

UBS PERLES Plus or Bonus Certificates offer you attractive yield opportunities even if the underlying asset (e.g. equity or index) does not significantly gain in value as expected, since UBS PERLES Plus enable you to improve yields in sideways markets depending on the product features in addition to the unlimited earnings opportunity. As an investor, you participate unconditionally 1:1 in a potential positive performance of the underlying asset. In exchange for the dividend of the underlying asset, UBS PERLES Plus offers you conditional partial protection, i.e. should the underlying asset never be listed at or below a predefined barrier (kick-out level) during the term, a minimum repayment is effected at maturity, which corresponds to the predefined PERLES Plus bonus level.

However, this partial protection ceases to apply if a barrier is broken during the term. According to this, PERLES Plus behaves like a normal PERLES, i.e. investors also participate in a negative performance of the underlying asset 1:1 without restriction, and so losses are likely.

You can find a more detailed product description of UBS PERLES Plus in our brochure.

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UBS Leveraged PERLES Plus

SVSP: Bonus Outperformance Certificate (1330)

Payoff diagramm UBS Leveraged PERLES Plus (Bonus Outperformance Zertifikat)

With UBS Leveraged PERLES Plus, also known as outperformance certificates, you can apply leverage, since UBS Leveraged PERLES offer you the chance to participate disproportionately and without restriction in rising prices of the underlying asset (e.g. an equity, an index or a currency pair). This means that as of a predefined price level (the so-called strike level) participation in a potentially rising price performance is higher than 100%. The exact performance rate varies depending on the product features and is fixed per issue.

To minimize the loss risk, UBS Leveraged PERLES Plus has conditional partial protection. As long as an additionally included safety threshold (kick-out level) is not reached during the term, you recoup at least the capital invested on the due date. The partial protection only ceases to apply if a threshold is breached and the product behaves like a normal UBS Leveraged PERLES as of the due date. If the underlying asset exceeds the strike level again, however, there is still a chance of disproportionately participating in potential prices gains of the underlying asset.

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UBS Absolute PERLES Plus

SVSP: Twin-Win Certificate (1340)

Payoff diagramm UBS Absolute PERLES Plus (Twin-Win Zertifikat)

With UBS Absolute PERLES Plus you can pull off a remarkable balancing act on the markets, i.e. whether the underlying asset (e.g. equity or index) rises or falls, you can profit in both cases. In doing so, you participate 1:1 in price gains of the underlying asset over and above the strike price without restriction (taking into account the subscription ratio). Price losses below the strike price are, on the other hand, converted accordingly on the due date if the price of the underlying asset has never fallen to or below a specific barrier (Knock-Out Level) during the term. However, after a barrier has been broken the conversion of prices losses of the underlying asset into gains ceases to apply. Instead, in this case UBS Twin-Win PERLES Plus behaves like conventional UBS PERLES, so that price losses of the underlying asset (under the strike price) lead to corresponding losses in the certificate.

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