UBS DLCs

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Get rewarded when you trade two Daily Leverage Certificates (“DLC”) issued by UBS from 17 July to 16 Oct 2023

Trade two Daily Leverage Certificates (“DLC”) issued by UBS from 17 July to 16 Oct 2023 and get rewarded

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What is a DLC?

A Daily Leverage Certificate (DLC)  is a form of structured financial instrument issued by banks and traded on the securities market. DLCs offer investors fixed leverage of 3 to 7 times the daily performance of an underlying index, be it a rising or falling market. The basic principle is simple – if the underlying index moves by 1% from its closing price of the previous trading day, the value of the 3x DLC will move by 3%.

SGX is Asia’s first venue to offer trading in DLCs, allowing investors to gain fixed leveraged exposure to developed Asian market indices and single stocks. This comes without the features impacting pricing for options such as implied volatility, time decay or margin calls.

DLCs were first introduced in Europe in 2012, where they are also called constant leverage products or factor certificates. They received wide interest from investors in Europe shortly after their launch.

How do you trade DLCs?

Daily Long and Short

DLCs are designed to be traded over short periods of time, predominantly on an intra-day basis. DLCs offer the flexibility to trade both rising and falling markets. For each underlying and leverage level, there is a long and short DLC available. A bullish investor who anticipates that the underlying index is set to rise over the trading day can select, for example, a 3x Long DLC, which will rise in value by 3% for each 1% rise in the underlying index (before costs & fees). Conversely, a bearish investor who anticipates the underlying index to fall can select, for example, the 3x Short DLC, which will rise in value by 3% for every 1% fall in the underlying index (before costs & fees).

Compounding Effect

If an investor’s trading horizon extends beyond a few days, it’s important to note that the performance of the DLC may vary from the leverage factor of the DLC. This is due to the performance of both the underlying index and the reset of DLC at the end of each trading day. When markets open the following day, the performance of the underlying index and the DLC will be measured from the closing levels recorded on the previous trading day. This means that any subsequent performance of the DLC is calculated based on the performance achieved the day before. This same process is repeated on each trading day. Over the period of more than one day, the profits or losses are thus compounded.

Airbag Mechanism

An airbag mechanism is built into each DLC to slow the rate of loss in the DLC during extreme market conditions. Each DLC listed has a pre-set trigger for the airbag mechanism, which is typically activated upon a 10% movement in the underlying index for a 5x DLC and a 20% movement for a 3x DLC (based on the closing price of the underlying index in the previous trading day). The airbag mechanism will only be triggered upon movements of the underlying index that goes against the direction of the product. For example, if the underlying index falls by 20%, (a) the airbag mechanism for a 3x Long DLC will be triggered, as the value of the DLC would decline with the drop in the underlying index. However, (b) the airbag mechanism for a 3x Short DLC would not be triggered because with the fall in the underlying index; This DLC’s value would increase in value by 60% (3 x 20%).
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Why Trade DLCs?

Leverage up to 7 times the daily performance of an underlying index

Flexibility to trade both rising and falling markets

Low capital outlay and loss limited to invested amount

No margins. No implied volatility impact. No time decay impact.

Transparent pricing due to tradability of the products on exchange

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Frequently Asked Questions

You must be a POEMS Customer who trades UBS Daily Leverage Certificates (DLC) from 17 July 2023 to 16 October 2023, and executes at least TWO transactions on Daily Leverage Certificates (DLC) issued by UBS.

Once the promotion ends, we will contact you via the email address you have registered with POEMS and give you the  details on how to collect your vouchers. Please note that these vouchers will only available for collection by customers residing in Singapore.

You can identify the Issuer through the DLC name.
Here is an example using the counter Tencent. TSGW – Tencent 5xLongUB241231

 

TSGW                  Counter Code

Tencent              Underlying

5x                         Leverage Factor

Long                    Long/Short

UB                        Issuer (UB = UBS)

241231                  Expiry Date (YYMMDD)

As a leverage product, Daily Leverage Certificates (DLC) give investors  increased exposure to an underlying asset with the potential for higher returns. The leverage of a DLC can be 3, 5 or 7 times. Based on 5x leverage, if the underlying asset, typically a single stock or index, moves 2% in favour from its previous closing price, you earn a 10% gain on the DLC (2% * 5 = 10%). However, if the underlying asset moves in the direction against your position, you could experience a -10% loss.

Please contact your dealer or Trading Representative. Alternatively, please contact our Customer Experience Unit otline at 6531 1555 or send an email to talktophillip@phillip.com.sg

Terms and Conditions

  1. This promotion is for Customers who trade UBS Daily Leverage Certificates (DLC) issued by UBS from 17 July 2023 to 16 October 2023 (the Promotion Period). 
  2. Eligibility Criteria for the reward:
    1. Accounts used for trading of DLCs must be Cash Plus, Margin (M), Custodian (C), Prepaid Custodian (CC), Cash Management (KC) and Share Financing (V) Accounts.
    2. At least TWO transactions on Daily Leverage Certificates (DLC) issued by UBS must be executed.
  3. The reward is capped at S$88 per customer, regardless of the number of Eligible Accounts through which the Customer places UBS DLC trades during the Promotion Period.
  4. Each Customer can only claim the reward once. Customer(s) with multiple Accounts will not qualify for the reward again.
  5. The reward will be credited to Eligible Accounts by 31 December 2023.
  6. The following persons are not eligible for this reward, unless approved by the management of Phillip Securities Pte Ltd (“PSPL”):
    • PSPL institutional customers and corporate customers
    • PSPL account holders whose accounts have been suspended, cancelled or terminated
    • PSPL and its associated entities and subsidiaries (direct or indirect), e.g. Staff, and Financial Advisory Representatives.
  7. In the event of a dispute over the customer’s eligibility to participate in this reward, PSPL’s decision will be final.
  8. PSPL reserves the right at any time in its absolute discretion to (i) amend, add to, and/or delete at any time of these Terms & Conditions without prior notice (including eligibility and qualifying terms and criteria), and all participants shall be bound by such amendments, additions and/or deletions when effected, or to (ii) vary, withdraw, and/or cancel any items or the reward itself without having to disclose a reason, and without any compensation or payment whatsoever. PSPL’s decision on all matters relating to the reward are final and binding on all participants.
  9. By taking part in this reward, the participant acknowledges that he/she has read and consented to these Terms & Conditions.

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IMPORTANT INFORMATION

This material is provided by Phillip Capital Management (S) Ltd (“PCM”) for general information only and does not constitute a recommendation, an offer to sell, or a solicitation of any offer to invest in any of the exchange-traded fund (“ETF”) or the unit trust (“Products”) mentioned herein. It does not have any regard to your specific investment objectives, financial situation and any of your particular needs. You should read the Prospectus and the accompanying Product Highlights Sheet (“PHS”) for key features, key risks and other important information of the Products and obtain advice from a financial adviser (“FA“) pursuant to a separate engagement before making a commitment to invest in the Products. In the event that you choose not to obtain advice from a FA, you should assess whether the Products are suitable for you before proceeding to invest. A copy of the Prospectus and PHS are available from PCM, any of its Participating Dealers (“PDs“) for the ETF, or any of its authorised distributors for the unit trust managed by PCM.  

An ETF is not like a typical unit trust as the units of the ETF (the “Units“) are to be listed and traded like any share on the Singapore Exchange Securities Trading Limited (“SGX-ST”). Listing on the SGX-ST does not guarantee a liquid market for the Units which may be traded at prices above or below its NAV or may be suspended or delisted. Investors may buy or sell the Units on SGX-ST when it is listed. Investors cannot create or redeem Units directly with PCM and have no rights to request PCM to redeem or purchase their Units. Creation and redemption of Units are through PDs if investors are clients of the PDs, who have no obligation to agree to create or redeem Units on behalf of any investor and may impose terms and conditions in connection with such creation or redemption orders. Please refer to the Prospectus of the ETF for more details.  

Investments are subject to investment risks including the possible loss of the principal amount invested. The purchase of a unit in a fund is not the same as placing your money on deposit with a bank or deposit-taking company. There is no guarantee as to the amount of capital invested or return received. The value of the units and the income accruing to the units may fall or rise. Past performance is not necessarily indicative of the future or likely performance of the Products. There can be no assurance that investment objectives will be achieved.  

Where applicable, fund(s) may invest in financial derivatives and/or participate in securities lending and repurchase transactions for the purpose of hedging and/or efficient portfolio management, subject to the relevant regulatory requirements. PCM reserves the discretion to determine if currency exposure should be hedged actively, passively or not at all, in the best interest of the Products.  

The regular dividend distributions, out of either income and/or capital, are not guaranteed and subject to PCM’s discretion. Past payout yields and payments do not represent future payout yields and payments. Such dividend distributions will reduce the available capital for reinvestment and may result in an immediate decrease in the net asset value (“NAV”) of the Products. Please refer to <www.phillipfunds.com> for more information in relation to the dividend distributions.  

The information provided herein may be obtained or compiled from public and/or third party sources that PCM has no reason to believe are unreliable. Any opinion or view herein is an expression of belief of the individual author or the indicated source (as applicable) only. PCM makes no representation or warranty that such information is accurate, complete, verified or should be relied upon as such. The information does not constitute, and should not be used as a substitute for tax, legal or investment advice.  

The information herein are not for any person in any jurisdiction or country where such distribution or availability for use would contravene any applicable law or regulation or would subject PCM to any registration or licensing requirement in such jurisdiction or country. The Products is not offered to U.S. Persons. PhillipCapital Group of Companies, including PCM, their affiliates and/or their officers, directors and/or employees may own or have positions in the Products. Any member of the PhillipCapital Group of Companies may have acted upon or used the information, analyses and opinions herein before they have been published. 

This advertisement has not been reviewed by the Monetary Authority of Singapore.  

 

Phillip Capital Management (S) Ltd (Co. Reg. No. 199905233W)  
250 North Bridge Road #06-00, Raffles City Tower ,Singapore 179101 
Tel: (65) 6230 8133 Fax: (65) 65383066 www.phillipfunds.com