🧩 What does issuer risk mean?
Issuer risk describes the risk that the publisher of a financial product (the issuer) can no longer fulfil its payment obligations - for example due to insolvency or financial difficulties. In the case of certificates, this means: 👉 The investor is a creditor of the issuer. If the issuer is unable to pay, there is a risk of partial or total losses.
🏦 Where does issuer risk occur - and where not?
Relevant forms of investment (with issuer risk):
- Certificates (e.g. Wikifolio certificates)
- Structured products
- Corporate bonds
- Government bonds (credit risk of the state)
No issuer risks in the traditional sense:
- ETFs → Special assets
- Mutual funds → Special assets
- Shares held directly → Company risk, but no issuer risk via an intermediate issuer
Wikifolio certificates clearly belong to the first category.
🛡️ Issuer risk for Wikifolio certificates (Lang & Schwarz)
Wikifolio certificates are issued by Lang & Schwarz (L&S) issued. Legally they are Debt securities - not a fund, not a special fund.
Speciality: Collateral solution
Wikifolio uses a Backup structure, that minimise the risk reduced, but not completely eliminated:
- L&S deposits collateral (hedge positions)
- These are Stored separately
- A Trustee monitors the collateral
- In the event of collateralisation, the assets are realised in favour of the investors
👉 This reduces the risk, but does not replace special assets.
⚠️ What happens in an emergency?
If the issuer defaults, the following scenarios may occur:
- Delayed repayment
- Partial repayment (e.g. 90-95 % instead of 100 %)
- Total failure, if collateral is not sufficient
Procedure for Wikifolio certificates:
- Trustee realises the collateral
- Proceeds are paid out to certificate holders
- Shortfalls become an insolvency claim
- These may only be partially served
👉 The risk is reduced, but not eliminated.
📊 How can issuer risk be assessed?
Important factors:
- Creditworthiness of the issuer
- Transparency of the security structure
- Regulatory environment
- Market environment & liquidity
- ConcentrationHow dependent am I on one issuer?
👉 Issuer risk is ultimately a Credit risk.
🔧 How can issuer risk be reduced?
- Diversification via issuers
- Limitation of the certificate quota in the overall portfolio
- Favouring transparent structures
- Regular review of the issuer environment
- No overweighting of individual certificates
For Mueckinvest you can communicate clearly: 👉 Strategy risk is actively managed - issuer risk remains systemic.
🧠 How does issuer risk fit into the overall view of a wikifolio?
With Wikifolio certificates, an investor bears Two risk dimensions:
1️⃣ Strategy risk
- Market movements
- Volatility
- Misjudgements
- Timing risks
2️⃣ Issuer risk
- Default risk of Lang & Schwarz
- Dependence on collateral
- Insolvency risk
👉 Both risks have an effect side by side and must be evaluated together.
📘 Brief summary for investors
- Wikifolio certificates are Transparent, but not protected by special assets
- Collateralisation reduces the risk, but does not eliminate it
- Investors should consider issuer risk Plan consciously
- For long-term strategies, it is a Important component of the overall view
🔎 Further assessments & market commentaries
Current assessments of market phases, risks, strategies and Rebalancing-You can find the latest news and decisions at any time in the news section. There I regularly analyse developments that may also influence issuer risk.