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Daily range accrual

What is a daily range accrual and how does a fund manager explain it to a client?

What is daily range accrual?

Daily range accrual is a financial instrument, typically used in structured products or derivatives, that accrues interest based on the daily price movements of an underlying asset, like a stock or an index.

An example of a daily range accrual investment

Based on a 3.50% Income Semi-Annual Daily Range Accrual Note

The illustration is split into two sections:

  1. The investment terms briefly outlines the terms of the trade.

  2. The flowchart shows the potential returns the investor will earn over the life of the trade and how these returns are dependent on the performance of the index 

Investment terms
 

  • 6 year term

  • Maximum income of 3.50% semi-annually

  • Income dependent on how many days the Index has closed within the range of 6500 - 7500

  • Maximum total return of 42%

  • Capital is protected if the Index is above 3500 at the end of the 6 years

  • If the Index is below 3500 at maturity the 1p capital will be lost for every 1% fall in the Index


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Payoff summary: How is the income paid?

Daily Accrual.png
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Tom May 

CEO & CIO

​

23 years of experience

15 years in group

Jim May 

Fund Manager

​

14 years of experience

6 years in group

Russ Bubley

Fund Manager

 

25 years of experience

7 years in group

Dedicated to managing your investment

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Source:  Atlantic House

Distributions

Investors who receive distributions from the Fund should be aware that these payments are made from capital, this will limit the potential for capital growth.

    •  This is a marketing communication.

    • A copy of the English version of the Supplement, the Prospectus, and any other offering document and the KIID can also be viewed at www.geminicapital.ie.  A summary of investor rights associated with an investment in the Fund is available in English at www.geminicapital.ie.

    • A decision may be taken at any time to terminate the arrangements for the marketing of the Fund in any jurisdiction in which it is currently being marketed. Shareholders in affected EEA Member State will be notified of any decision marketing arrangements in advance and will be provided the opportunity to redeem their shareholding in the Company free of any charges or deductions for at least 30 working days from the date of such notification.

    • The Fund is not sponsored, promoted, sold or supported in any other manner by Solactive AG nor does Solactive AG offer any express or implicit guarantee or assurance either with regard to the results of using the Index and/or Index trademark or the Index Price at any time or in any other respect. The Index is calculated and published by Solactive AG. Solactive AG uses its best efforts to ensure that the Index is calculated correctly. Irrespective of its obligations towards the issuer, Solactive AG has no obligation to point out errors in the Index to third parties including but not limited to investors and/or financial intermediaries of the Fund. Neither publication of the Index by Solactive AG nor the licensing of the Index trademark for the purpose of use in connection within the Fund constitutes a recommendation by Solactive AG to invest capital in said Fund nor does it in any way represent an assurance or opinion of Solactive AG about any investment in this Fund.

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