Thursday, 6 July 2023 Reading time : 2 minutes

Barrier Reverse Convertibles allow for an attractive yield while reducing risk compared to direct investments.

Callable BRC on Swisscom, Swiss Life and Julius Bär

• 9% coupon p.a.
• 59% barrier
• 18 months maturity
• Termsheet

---

Swisscom: Defensive market leader
Thanks to its defensive business model, the telecom company's share is a popular safe haven for many investors. Particularly in turbulent markets, the share price benefits from sector rotations, which was the case in 2022. However, it is not only the conservative nature of the Swisscom share that attracts investors, but also the company's profitability. The group's cash flows are stable and dividend payouts have been constant for years. ZKB Equity Research rates the share as "overweight".

Swiss Life: New accounting standard, same targets
Like other insurance companies, Swiss Life is changing its accounting standards in the course of this year; the group will be reporting in accordance with IFRS 17. Although this new standard reduces some key profit figures, both the dividend and solvency remain unchanged. In particular, the strategically important and profitable fee business will not be significantly affected by the changeover to the new standard, and the life insurer's financial targets will not be adjusted. ZKB Equity Research continues to rate the share as "overweight".

Julius Bär: Well positioned in a competitive industry
In global private banking, various market players are vying for the favor of wealthy clients. Julius Baer's strategic focus is entirely on this business segment and it is consistently pursuing growth plans. The private bank has successfully positioned itself in emerging markets, and is a particularly strong player in China and Latin America. The private bank is also well positioned for potential acquisitions, which would also allow for inorganic growth with a corresponding increase in AuM. 

A dividend yield of over 4.7% supports the attractiveness of the stock. Due to these circumstances and the still attractive valuation, ZKB Equity Research rates it as "overweight".