An honorable remuneration with SG Duo Europe

Société Générale is offering SG Duo Europe until September 30 (Isin code: FR001400A4D9), debt security with a maximum life of ten years, whose performance depends on that 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.

At the end of years 1 and 2, the investor receives a coupon of 3% regardless of the performance of the index. At the end of the second year, an early redemption can take place every year if the index has not fallen by more than 5%, with the key to a gain of 4% per year elapsed since the origin, i.e. a maximum annual rate of return of 6.8% in the event of repayment in two years. Otherwise, at the end of the ten years, on October 14, 2032, the saver will receive a gain of 4% per year elapsed, or 40% in all, if the index has not lost more than 5%. The annual remuneration will then have been 4%. For a drop of between 5% and 50%, the saver will receive his capital as well as the 3% coupons paid at the end of the first and second year, ie an annual return of 0.6%. With a decline of more than 50%, a similar loss, but reduced by the two coupons received, will be observed.

Maximum entry fee: depending on the life insurance or capitalization contract; value of the share: 1,000 euros.

Investing opinion

SG Duo Europe’s annual remuneration will be between 4% and 6.8% assuming that the benchmark index does not permanently decline by more than 5% at each annual observation. Given the current subdued levels of Eurozone equities, this is the most likely scenario. The return will therefore be honorable in the event of reimbursement in the first five years. As for the risk of loss, it is infinitesimal, since it would take not only a constant decline for 10 years, but also that the final level be historically comparable to the lows of 2003 and 2009.