Underlying reference. The performance of the bond depended on the underlying basket of 10 Finnish company stocks with equal weight in each one (1/10). At the maturity of the bond, the result of the four best performing equities was replaced by an increase of + 40%.

Index-linked bond performance review

The bond was structured to benefit from the Finnish equity market, which offered to investors great return opportunities over the long term. The overall Eurozone expansionary monetary policy, the focus of local companies on the developing country markets and their experience in the field of technology combined with a successful business and cost control management potentially pledged the value growth of the respective equities at bond’s issuance date.
 
Finnish equity market performed very strongly during the lifetime of the bond. Despite being severely hit by anti-Russia sanctions in 2014 Finnish economy managed to recover and handsomely outpace the average EU economic growth since year 2016. Concentration of Finnish companies in cyclical industries and significant export orientation helped them take advantage of improving global economy and trade. As a result, Finnish equity market provided double the return of the overall European equity market and outperformed global stocks by over 10% during the tenure of the bond. Consequently, the bond had a strong performance, especially taking into account its low risk.
 
Index-linked bond performance


Further investments

We recommend considering reinvestment of the nominal value and return on your investment. To get a recommendation on the possible investment options that are suitable for your investment goals, please contact your personal investment advisor. In order to get more information on all current investment solutions, please visit Luminor homepage luminor.lt.