Investors have recently focused on the Infineon share due to a sharp rise in the price. Bonus certificates with a cap enable investors to achieve returns above the inflation rate even if the share cannot maintain the high level.
With a price increase of 29 percent within the past month, the Infineon share is one of the strongest DAX stocks for this period. This impressive price rally was fueled by the figures for the fourth quarter, which were above expert expectations and the increase in the forecast, as well as the structurally increasing demand for semiconductors due to decarbonization and digitization.
After the publication of the consistently positive company news, the vast majority of experts with price targets of up to EUR 47.40 (Credit Suisse) confirmed their buy recommendation for the Infineon share.
The investment idea
Based on the positive news situation, the Infineon share could have further upside potential even after the strong price increase. However, if you want to significantly reduce the risk of buying shares directly and still want to achieve returns above the high inflation rate, you could consider investing in a bonus certificate with a cap.
Apart from dividend payments, private investors can only achieve positive returns when buying a share directly if the price rises. Compared to direct share purchases, bonus certificates with and without a cap offer investors opportunities for annual returns in the double-digit percentage range not only when the share price rises, but also when the price stagnates or falls.
The way it works
If the Infineon share never touches or falls below the barrier of EUR 19 by the certificate’s valuation date, the bonus certificate will be repaid on December 22, 2023 with the bonus level of EUR 40.
The key data
The HSBC bonus certificate with a cap (ISIN: DE000HG6YKS2) on the Infineon share has a bonus level and a cap of EUR 40. The cap defines the maximum repayment amount of the certificate. The barrier activated until the valuation date, December 15, 2023, is 19 euros. With the Infineon share price of EUR 31.86, investors could buy the certificate for EUR 33.62.
The chance
Since the certificate is currently available for EUR 33.62, it enables a gross return of 18.98 percent (=17.32 percent per year) in 13 months if the share price has never fallen by 40.36 percent to EUR 19 by the valuation date or falls below.
The Risks
If the Infineon share loses more than 40 percent of its value by the valuation date and touches the barrier of EUR 19 and the share is listed below the cap on the valuation date, the certificate is redeemed at the closing price of the share determined on the valuation date. If this is determined below EUR 33.62, then the certificate investment will cause a loss.
This article does not constitute a recommendation to buy or sell Infineon shares or investment products based on Infineon shares. No liability is assumed for the correctness of the data.