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Transfers Frequently asked questions about Certificates
How does the purchase and sale of certificates work?
Certificates are financial products that replicate the performance of an underlying asset. The underlying asset can be a sector index (such as banking or telecommunications), a commodity (such as gold) or a regional index (such as the EURO STOXX 50, the S&P500 or the PSI20).
By investing in certificates you are investing in all the companies that make up an index or in commodities without having to buy them. Suppose you buy an S&P500 Certificate. By buying this certificate, you are buying a share of each of the 500 companies that make up the index. So if the value of the S&P500 goes up, so does the value of your investment.
The stock exchange is a trading market where you can buy and sell securities. To buy a security you need to have that security for sale at the price you are willing to pay. Normally, the transaction is not made directly between seller and buyer, but through intermediaries, such as Millennium bcp.
There is no minimum amount to invest. You can start investing in certificates by buying a unit (which is the minimum portion available to buy or sell), the value of which depends on its stock exchange price.
The certificate price mirrors the underlying asset's value progression, minus the Management Cost (if applicable). All factors impacting the underlying asset and markets similarly influence the certificate price. These include economic indicators, corporate outcomes, news signifying political stability or instability, and prospects of economic acceleration or deceleration - such as a global pandemic.
- Stock indices: replicate the performance of a set of shares of the companies that make up the index. These indices can be sectoral or regional.
- Multiasset: invest diversely across equities and bonds, with different risk profiles available corresponding to different allocations to these two asset classes.
- Commodities: replicate the performance of commodities, such as gold.
Yes, to redeem your money you just need to sell the units you bought. To do this, you will need to give a sell order with the amount you want to sell. If there is a counter order to buy at the same price, the transaction will be automatic and you will have the money available in your current account.
When purchasing a certificate, potential income can arise from asset appreciation. Selling a certificate above its purchase price leads to capital gains, subject to a 28% IRS tax rate. Suppose you buy a BCP S&P 500 EUR certificate unit at EUR 28.36 and later sell it at EUR 30.36. This yields a EUR 2 capital gain, taxed at 28%, resulting in a EUR 0.56 tax.
Investing always comes with a risk. Therefore, it's crucial that you understand your investor profile before making any investments. Once you complete the Investor Questionnaire, we will recommend suitable products based on your profile, helping you steer clear of investments that don't align with your comfort level.
