Diversify Offshore with Structured Autocall Investments

Ruvan J Grobler • May 21, 2025

Structured Investments are pre-packaged investment strategies with predetermined payouts and can be linked to a variety of underlying assets (e.g., equities, indices, commodities, or currencies). Some structured products include downside protection, which can cushion losses in adverse market conditions. By diversifying into different protection levels and structures, you can tailor the risk exposure of your overall portfolio.

 

An autocall investment is a structured note that can end early if the linked index, like the Nikkei 225 or Euro Stoxx Select 30 Dividend Index, performs well enough. It runs for a fixed period of five years but is reviewed once a year. If the asset is at or above a certain level on a review date, the note "autocalls": it ends, you get your original money back, plus a set return. If it doesn’t autocall, it keeps going. At the end, if the asset hasn’t fallen too far, you still get your money back. But if it has dropped below a certain threshold, you could lose money based on how much it fell.

 

  • Who is this for?

Investors looking for offshore exposure with a level of capital protection. Minimum R100 000.

 

  • Credit risk:

Structured products are often issued by banks or financial institutions. Spreading investments across different issuers can reduce exposure to the credit risk of any one issuer. In this example Investec is the issuer, but the credit reference can be any of the following: Commerzbank AG, Credit Agricole, BNP Paribas SA.

 

  • Protection:

In this example, 100% capital protection in Rand provided the index does not end below 70% of Initial Index Level.

Examples (corresponding to numbers of the graph) assuming R100 000 is invested.

 

1) Pay out = R100 000 x (17.0% x 1) = R117 000

2) Pay out = R100 000 x (17.0% x 3) = R151 000

3) Pay out = R100 000 x (17.0% x 5) = R185 000

4) Pay out = R100 000 x 100% = R100 000 (Index down <30%)

5) Pay out = R100 000 x 65/100 = R65 000 (Index -35%)

 

A stock broking account is required for these investments; we can assist in setting up an account if needed. Dollar denominated investments are also available. Interested investors can reach out directly to me at ruvan@bovest.co.za for more information.

 

The above is factual information only and does not constitute financial advice.

 

Ruvan J Grobler RFP™ (PGDip Financial Planning)

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