The Siemens Energy share has increased by 60 percent in the past few weeks. Bonus certificates with a cap enable investors to earn returns in the double-digit percentage range even if the strong upward trend falters.

Siemens Energy shares have been on a strong upward trend since their low for the year on October 13, 2022 at EUR 10.25. After the publication of the good figures for the fourth quarter, the share rose to as much as EUR 16.38 and was thus 60 percent above the low for the year from mid-October. Subsequently, however, the share was not quite able to maintain the high level.

Since Siemens Energy could become one of the winners of the energy crisis in the medium term, experts with price targets of up to EUR 34 (Berenberg Bank) reiterated their buy recommendations for the share.

The investment idea

Although the price of the Siemens Energy share has increased by 60 percent in the past 6 weeks, there could still be a chance of further price gains even at the current high level. However, if you want to significantly reduce the undoubtedly existing price risk of direct share purchases and still want to achieve a return in the double-digit percentage range, you could consider purchasing a bonus certificate with a cap as an alternative to buying shares.

Apart from dividend payments, the direct purchase of Siemens Energy shares will only enable a positive return if the share price rises. With bonus certificates with and without a cap, investors can achieve disproportionately high returns not only when the share price rises, but also when prices are stagnating or falling.

The way it works

If the Siemens Energy share never touches or falls below the barrier of EUR 10.50 by the certificate’s valuation date, the bonus certificate with cap will be repaid on December 22, 2023 with the maximum repayment amount of EUR 15.

The key data

The HVB bonus certificate with a cap (ISIN: DE000HC1QFV7) on the Siemens Energy share has a bonus level and a cap of EUR 15. The cap defines the maximum payout amount of the certificate. The barrier activated until the valuation date, December 15, 2023, is EUR 10.50. With the Siemens Energy share price of EUR 15.88, investors were able to purchase the certificate for EUR 12.77.

The chance

Since the certificate can currently be bought at 12.77 euros, it enables a gross return of 17.46 percent (equivalent to 16.40 percent per year) until December 2023 if the share price never falls by 33.88 percent to 22 .50 euros or below.

The Risks

If the Siemens Energy share price touches the barrier of EUR 10.50 by the valuation date and the share is listed below the cap on the valuation date, investors will receive one Siemens Energy share for each certificate in their custody account. If this share is sold below EUR 12.77, the purchase price of the certificate, then the investment will cause a capital loss.

This article does not constitute a recommendation to buy or sell Siemens Energy shares or investment products based on Siemens Energy shares. No liability is accepted for the correctness of the data.