I asked my banker for potentially more profitable investments than Austrian bonds (), and this seems ok to me, but I want to check if I am missing something. It's an Autocallable Fixed Coupon Note, for Shell (RDSA:AS, they don't offer it for RDSB:AS), and if I understand correctly (see below for their snapshot): I have to invest 100,000 Euros, and I am given 6% a year. If the price drops below 26.441 within the next 12 months I am given the stocks (so if the stocks drop to 25, I lose 1.441 per stock). If the price is above 29.005 I get 6%.
From their brochure: 1) If the Reference Share closes at or above the predefined Strike Price at maturity, the investor will receive the Nominal Amount. 2) If the Reference Share closes below the predefined Strike Price at maturity, the investor will take delivery of the Reference Share at the predetermined Strike Price, or if the investor has opted for cash settlement, the investor will receive a cash amount equal to market value of the Reference Share on Valuation Date. This may result in a significant loss.My reasoning is that now the dividend of RDSA:AS is 1.88 Euros, which means that at 26.441 I would have a dividend of 7.11% (-15%=6.04%). The price may as well go below 26.441 within the next 12 months, in which case I will get the shares, but I will still get a dividend of 1.88 Euros. My reasoning is: would I buy RDSA shares at 26.441 today? Yes, definitely. Even if tomorrow of course the price might be lower. Am I missing something? Thoughts are very welcome, since I don't know much about these things, and I am not very bright.