Commerz launches its first structured product for UK market

Commerzbank Corporates & Markets (CBCM) has launched its first structured product targeted at the UK market. The UK Premia Fund is a Ucits III compliant fund linked to the Commerzbank Rolling Reverse Convertible Strategy index UK (Cobarc UK). The index is designed to replicate the returns earned from a systematic strategy of investing in reverse convertibles linked to the FTSE 100 index.

The reverse convertibles are one-month bonds based on the FTSE 100 index with 10% soft downside protection, allowing the opportunity to sell downside market exposure greater than 10% over a one-month period. If the FTSE 100 does not fall by 10% or more during the month, then the fund keeps the premium received by selling this exposure. If the fund touches or exceeds the 10% barrier, then a loss of 1:1 is incurred in line with the market. However, the product retains the premium for selling risk