Earning an annual interest rate of 9.7% over a two-year period is possible via Volkswagen, without involving the Volkswagen Bank, but also without receiving daily payouts.
HSBC has introduced a unique investment opportunity for those seeking higher returns: a stock bond linked to Volkswagen (VW) preferred shares. The product, identified by the WKN HS9N9D, offers an attractive yield of 9.7% per annum for a two-year period.
However, it's essential to understand that this stock bond comes with moderate to high risk, unlike a traditional savings account. The returns are tied to the performance of the VW stock, and the investment is not guaranteed, unlike savings accounts which are often FDIC-insured.
Here's a comparison between the stock bond and a high-yield savings account:
| Aspect | Stock Bond (like "Stock Bond on VW Vz.") | Savings Account (e.g., High-Yield Savings Account) | |------------------|------------------------------------------------------------|-----------------------------------------------------------------| | Risk | Moderate to high: Risk depends on issuer (VW stock) and market conditions; includes equity market risk and potential default risk if corporate issuer faces difficulties. | Very low: Often FDIC-insured, meaning principal protection up to certain limits; minimal risk of loss. | | Returns | Potentially higher returns linked to stock performance and coupon payments, but returns fluctuate with market conditions and are not guaranteed. | Low to moderate fixed interest, which may be periodically adjusted; yields generally lower than stock bonds but stable. | | Guarantees | Usually no principal or interest guarantee; value can fluctuate, and there is risk of capital loss, especially if linked to stock performance. | Protected by deposit insurance schemes (like FDIC), so principal and accrued interest up to insured limit are guaranteed. | | Liquidity | May have limited liquidity depending on issuance terms; selling before maturity could lead to losses. | High liquidity; funds can generally be withdrawn anytime without penalty. | | Investment Horizon | Better for medium to longer-term investors willing to accept volatility for higher returns. | Suitable for short to medium-term savings and emergency funds due to safety and liquidity. |
It's worth noting that investors can lose money with a stock bond, unlike with a savings account. While the high yields can help offset potential losses up to a certain threshold, a loss is still possible with a stock bond.
Investors should be aware that this product does not provide exposure to the Volkswagen or Volkswagen Bank, and the yields are not paid by the car manufacturer. The high yield is guaranteed for two years, but this guarantee is subject to HSBC's financial stability.
This stock bond offers an attractive yield compared to savings accounts or time deposits offered by the Volkswagen Bank. However, it's crucial to consider the associated risks before investing. If the Volkswagen stock price is below the base price on the valuation date, investors will still receive the yields and the base asset on the repayment date in the number expressed by the conversion ratio.
For those seeking a more conservative investment, suitable savings account and time deposit offers can be found in the BÖRSE ONLINE Savings Account Comparison and the BÖRSE ONLINE Time Deposit Comparison.
Investors should carefully review the offer documents for a detailed description of possible risks and product conditions before making a decision. The securities presented are complex products that may be difficult to understand. If the conversion ratio contains fractions, these will result in an additional payment. Lastly, it's important to note that these securities carry a significant capital loss risk.
Access the stock bond here
[1] FDIC.gov, "Understanding Deposit Insurance Coverage," [Accessed 23 March 2023]. [2] Investopedia, "Savings Account vs. Time Deposit," [Accessed 23 March 2023]. [3] Investopedia, "Stock Bond," [Accessed 23 March 2023].
- This stock bond linked to Volkswagen preferred shares, offered by HSBC, is an investment opportunity that combines finance and technology, making it an attractive choice for tech-savvy investors seeking higher returns.
- While the risks associated with this stock bond are moderate to high, compared to a traditional savings account, it offers a yield of 9.7% per annum, making it an appealing option for those willing to accept a higher level of risk in their investing portfolio.
