Safe interest rate alternative: With TUI reverse convertible bonds 11% interest p.a. - financial expert recommends investment strategy

Safe interest rate alternative: With TUI reverse convertible bonds 11% interest p.a. - financial expert recommends investment strategy

According to a report by www.boerse-online.de, there is currently the opportunity to earn up to 11 percent interest per year on TUI shares with an interest alternative. The “Stock Bond on TUI” allows investors to earn high interest rates based on the performance of the TUI share up to the valuation date in November 2024. In addition, there is a safety buffer of 27 percent on the TUI share, which means that the share can fall by 27 percent without investors suffering losses.

The article emphasizes the potential advantages of this interest rate alternative, but also points out the risks associated with an equity bond. These include the dependence on the share price and the possibility of a loss, although the interest is guaranteed. The potential return is capped at 11 percent, and investors must be aware that equity bonds are more volatile and uncertain than overnight investments.

As an economic expert, I see this interest rate alternative as an opportunity for investors to achieve higher interest rates than with conventional overnight investments. However, they also have to take into account the increased risks and the dependence on the price of the TUI share. The limited amount of potential return and the limitations if the stock price rises sharply are also important factors that investors should consider.

Overall, this reverse convertible bond represents an interesting alternative, especially for investors who assume that the TUI share will move sideways or only lose moderately. If expectations are more positive, investors should invest directly in the stock. It is important to emphasize that this form of investing is not suitable for all investors and requires a thorough assessment of individual risk tolerance and investment objectives.