With discount certificates, investors can counteract price declines on the stock market in a solid manner. However, the upper cap limit has a braking effect on discount certificate investors when prices rise.
For example, while the European stock index suffered a price drop of 3.53 percent in September 2021, the discount index fell significantly smaller by 0.38 percent. The discount strategy paid off in the long term: since it was launched in January 2006, the discount index has achieved an annual return of 3.44 percent. The Euro Stoxx 50 underperformed with an annual gain of 0.74 percent over the same period.
While the discount index was not able to keep up with the returns of the Euro Stoxx 50 in the first few years, the former has been showing its strengths since the middle of the financial crisis year of 2008. The volatility of the index on discount certificates is only 10.98 percent compared to the volatility of 22.33 percent for the Euro Stoxx 50.