The Advantages of AMCs for Investors

Actively Managed Certificates (AMCs) have gained considerable importance in recent years. The reason lies in a combination of a growing range of offerings from wealth managers and a number of concrete advantages for investors. This article focuses on exactly these advantages and takes a factual look at them, including the risk that every investor should be aware of.

An Actively Managed Certificate (AMC) is a structured product whose underlying portfolio is actively managed according to a defined investment strategy throughout its term. It bundles various asset classes into a single certificate, tradable via an ISIN. Legally, it is a debt instrument: investors hold a claim against the issuer, not a share in a separate fund’s assets.

Key Points at a Glance

• One certificate, many asset classes: An AMC bundles equities, bonds, commodities or private markets into a single, tradable instrument.
• Low entry threshold: AMCs open access to underlying assets that are otherwise often reserved for institutional investors, starting with comparatively low investment amounts.
• Liquid and transparent: Via its ISIN, an AMC can be valued on every trading day and traded on the secondary market.
• Quick to implement: Everon typically sets up a tailor-made AMC within around three weeks.
• Mind the issuer risk: An AMC is legally a debt instrument. If the issuer defaults, partial or total loss is possible; a pledge collateralisation (COSI) can reduce this issuer risk.

Reading tip: Actively managed certificates (AMCs): types and delimitation

What advantages do AMCs offer investors?

AMCs combine the flexibility of structured products with an actively managed investment strategy. For investors, this translates into four tangible advantages: access to broad asset classes with a low entry amount, diversification through a single instrument, liquidity via the secondary market, and efficient, ongoing portfolio adjustments made by the wealth manager.

These advantages make AMCs a versatile building block, both for accessing specialised strategies and for implementing a broadly diversified investment in a single position. Below, we take a closer look at each advantage individually.

Why do AMCs enable a low entry threshold?

AMCs open access to a broad range of underlying assets with comparatively low investment amounts. This includes asset classes such as private markets or specialised fund strategies that individually often require high minimum sums. The certificate lowers this hurdle, making the strategy accessible even for smaller investment volumes.

Access does not replace an individual assessment: whether a strategy fits an investor’s own profile depends on investment objectives, risk capacity and time horizon. AMCs lower the entry threshold, not the due diligence required for selection.

How do AMCs provide diversification and flexibility?

An AMC allows a broad basket of assets to be assembled within a single certificate. Investors benefit from diversification across different asset classes and reduce their dependence on individual holdings. The composition can be adjusted within the defined strategy, creating additional flexibility.

This flexibility is also evident operationally. At Everon, a tailor-made AMC can typically be set up within around three weeks. This makes it possible to turn an investment idea into a tradable instrument comparatively quickly, without the effort of launching a dedicated fund.

How liquid and transparent are AMCs?

Even if individual underlying assets can be long-term or illiquid, an AMC is generally liquid: it can be traded via the secondary market. Via its ISIN, the investment can be valued on every trading day, and investors can track the development of their certificate on an ongoing basis. Actual tradability depends on the market situation and the specific product structure.

This transparency also extends to costs. The trading costs and fees of an AMC are generally clearly defined, which makes it easier for investors to plan and compare total costs.

How quickly can an AMC be adjusted?

The structure of an AMC allows for efficient reallocation of the underlying assets. Within the defined strategy, the wealth manager can respond to market changes and adjust the portfolio without the investor having to take action themselves. For the investor, the position remains one and the same tradable certificate.

This ongoing management is the key difference to a static basket certificate. With an AMC, active management is at the forefront, while the investor delegates the day-to-day execution to the wealth manager.

What risk should investors keep in mind with AMCs?

The central point is issuer risk. An AMC is legally a debt instrument, that is, a claim against the issuer, and not a share in a separate fund’s assets. If the issuer defaults, partial or total loss is possible, regardless of how the managed portfolio has performed. This point belongs in any assessment of AMC advantages.

In Switzerland, collateralisation options exist for some products through pledge rights, known as COSI certificates. Such a pledge collateralisation can reduce issuer risk; the conditions and scope depend on the recommendations of the Swiss Structured Products Association (SSPA) as well as the documentation of the respective issuer. The quality and creditworthiness of the issuer therefore remain a central selection criterion. This does not constitute investment advice.

Reading tip: Costs and tax treatment of actively managed certificates

Frequently Asked Questions on the Advantages of AMCs

What is the biggest advantage of an AMC for investors?

The biggest advantage is bundling: an AMC combines many asset classes, from equities and bonds to private markets, into a single certificate that is tradable via an ISIN. This gives investors access, through a single instrument, to an actively managed, broadly diversified strategy that can be adjusted on an ongoing basis without requiring them to reallocate themselves.

Are AMCs also suitable for smaller investment amounts?

AMCs provide access to a broad range of underlying assets with comparatively low amounts, in some cases even to asset classes such as private markets that are otherwise reserved for institutional investors. Whether an AMC is suitable in an individual case depends on investment objectives, time horizon and cost structure. This does not constitute investment advice.

How liquid is an AMC?

An AMC can be traded via the secondary market and is valued on every trading day via its ISIN. As a result, the investment is generally liquid, even if individual underlying assets are long-term in nature. Actual tradability depends on the market situation and the specific product structure.

What risk should investors keep in mind with an AMC?

The central risk is issuer risk. An AMC is legally a debt instrument, that is, a claim against the issuer, not a share in a separate fund’s assets. If the issuer defaults, partial or total loss is possible, regardless of the portfolio’s performance. A pledge collateralisation (COSI) can reduce this issuer risk. This does not constitute investment advice.

Are you a financial intermediary looking to set up an AMC? Speak with us.