For investors wishing to increase their long-term exposure to Swiss equities, Julius Baer is introducing a well-established strategy typically only available to institutional clients and linked to the Swiss Market Index (SMI). Designed for investors seeking returns comparable to the SMI but with lower expected drawdowns, this strategy combines an SMI exposure with a systematic call option overlay. This overlay is expected to generate additional income by selling call options on the SMI and also provide a certain buffer against drawdowns. In sideways and falling markets, this strategy can outperform the SMI, providing robustness when it is needed from a portfolio perspective. In addition, there is an innovative component that income-seeking investors will appreciate, namely a fixed quarterly distribution of CHF 12.50, which translates into a 5% yield on the denomination and compares favourably with the (current) 3% dividend yield on the SMI.
As the global market landscape continues to evolve, we remain confident in the attractiveness of Swiss equities. With the launch of this innovative SMI-linked strategy, investors can now benefit from the potential of Swiss equities with enhanced risk management and an attractive steady income component.
To subscribe to this product, contact your relationship manager or custodian bank.