The (LF) Special Purpose – Equity Formula Index ΙIΙ sub-fund aims mainly providing investors with capital gains, in line with a regular investment strategy based on the selected EURO STOXX 50, NIKKEI 225 and S&P 500 equity indexes.
Investment objective
To achieve this objective, the sub-fund has entered into OTC derivative transactions.
The performance of the Derivative Investment Strategy at the end of the investment period is based on a performance evaluation mechanism according to points a), b), c) and d) below:
a) The equity indexes are chosen: EURO STOXX 50, NIKKEI 225 and S&P 500.
b) 18 June 2019 is defined as the “Derivative Investment Strategy Initial Observation Date” or “Strike Date”, 29 June 2029 is defined as the “Derivative Investment Strategy Final Observation Date” and 26 June 2029 is defined as the “Derivative Investment Strategy Termination Date”.
c) If for at least one index from Indices A, B and C its closing level on the Final Observation Date is lower than its closing level on the Initial Observation Date, then on the Derivative Strategy Termination Date the Investment Strategy yields a return equal to 6.75% of the derivative financial instrument’s current nominal value.
d) Otherwise, i.e. if for all Indices A,B and C their closing levels on the Final Observation Date are equal to or greater than their corresponding closing levels on the Initial Observation Date, then on the Derivative Strategy Termination Date the Investment Strategy yields 26.5% return on the derivative financial instrument’s current nominal value.
At the same time, the sub-fund invests in a diversified portfolio of fixed income, money market instruments and other securities, to ensure that the income they provide is at least sufficient to cover the cost of financing the investment strategy.
The investor’s returns do not only depend on the performance of the derivative financial instrument investment strategy, but also on the performance of the investment portfolio.
To learn more about the potential return and risks associated with investing in the sub-fund, read the Key Investor Information Documents (PRIIP KID).
Investor profile
The (LF) Special Purpose – Equity Formula Index IΙΙ sub-fund has a high investment risk profile, mainly associated with the use of financial instruments linked to equity securities. The investors should take into account that the capital invested is potentially at risk. The sub-fund is addressed to investors with a long-term investment horizon seeking return from exposure to equity and fixed income markets.
