Underlying reference. The performance of the bond depended on the underlying basket of 10 companies from the Finnish stock market with equal weight in each one. 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 growth in the value of a basket of stocks of 10 companies from the Finnish stock market, which offered investors good long term return potential. Diversification of the companies across various sectors and industries combined with export orientation suggested attractive outlook at the bond issuance date, as the companies were expected to benefit from global economic expansion.

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. Additional positive contribution came from the quantitative easing program launched by the ECB and the global extremely loose monetary policy. As a result, export oriented companies benefitted from the global economic growth recovery by increasing sales and profits. And although due to higher concentration in the commodity and energy sector the underlying equity basket return was slightly lower than the Finish equity index, the basket did outperform the overall European stock market index. Consequently, the bond provided its investors reasonable return, considering its low risk.

Index-linked bond performance

Further investments

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