What is the Investec Dollar Nikkei 225 Autocall?

• The Investec Dollar Nikkei 225 Autocall is part of Investec's $1.5 billion Note Issuance Programme. It’s a type of investment where you, the investor, essentially lend your money to Investec and, in return, potentially earn a profit based on the performance of Japan's Nikkei 225 stock market index.

How Does It Work?
When you invest in this Autocall, your returns hinge on the performance of the Nikkei 225 Index. If the index performs well, even if it's just holding steady or growing ever so slightly, you could earn an 11.5% annual return in US dollars. This opportunity is open for up to five years, with the chance for an early payout each year.

Your initial investment is only safe if the Nikkei 225 doesn't plummet by more than 30% come the final valuation date. This makes it a somewhat safer bet than directly investing in stocks, but with its own set of risks.

The Nikkei 225 Index
Lots of international investors are getting interested in Japan again. By 2022, they owned more than half of the shares in Japanese companies. Plus, these companies are getting more diverse in who they have in charge.

The economy in Japan is expected to grow by 3% next year. And companies that are publicly traded (meaning you can buy their shares) are predicted to increase their earnings by 6-8% in 2024. This growth is expected to be led by companies that make semiconductors and electronics.

Back in 2020, Berkshire Hathaway decided to invest in five large Japanese firms: Itochu, Marubeni, Mitsubishi, Mitsui, and Sumitomo. This year, Buffett liked what he saw and bought even more of their shares, bringing his ownership up to an average of 8.5% in each. He's planning to buy even more, hoping to own up to 9.9% of each company eventually. Buffett believes in holding onto these investments for a long time.

• A chance to earn higher returns compared to traditional savings or fixed deposits.
• Exposure to the Japanese stock market without direct investment in stocks.
• An investment with a degree of capital protection.

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