A remunerative debt security from Société Générale | Photo credits: © European Union
Société Générale markets until June 30 SG Double Frequency N° 7 (Isin code: FR0014008140), debt security with a maximum lifespan of ten years. Its price depends on the evolution of the MSCI EMU Circular Economy Sustainable Impact Select 50 points Decrement index. It is made up equally of 50 companies in the euro zone that will enable the transition to a circular economy, in particular through the optimization of available resources, better waste management and the fight against pollution. A fixed levy of 5 points of he index takes place each year in exchange for the reinvestment of the detached gross dividends.
Assuming the latter is stable or rises, a quarterly remuneration mechanism of 1.75% (ie 7% per year) is planned. Otherwise, at the end of the ten years (July 7, 2032), in the event of a positive or zero final performance, the subscriber receives a remuneration of 70% (7% x 10), i.e. a gross annual return of 5.43%. For a decrease of a maximum of 50%, the capital is reimbursed. Finally, with a decline of more than 50%, a similar loss is recorded.
Maximum entry fee: depending on the life insurance or capitalization contract; value of the share: 1,000 euros.
Investing opinion
Barring a constant decline for 10 years in the underlying index, SG Double Frequency N° 7 should offer an attractive gross return, ranging between 5.43% and 6.86% per year, since it is higher than what offer most bonds. Furthermore, it would take a 10-year collapse of 50% of the underlying index, a low-probability assumption, to lose money. This debt security should therefore improve the risk/return profile of a bond portfolio.