Examples of Volatility Target in a sentence
Therefore an investment in the Notes is not equivalent to an investment into notes which are linked solely to the performance of the Fund without the application of the Volatility Target Mechanism or a direct investment into the Fund.
On each Index Business Day, the weighting of the Volatility Target Index is determined as described in section 4.
Investors should note that the volatility target mechanism (the "Volatility Target Mechanism{ XE "Volatility Target Mechanism" }") determines the proportion of the exposure of the underlying to which the Final Redemption Amount is linked (the "Reference Portfolio{ XE "Reference Portfolio" }{ XE "Reference Portfolio" }") that is allocated to the Fund.
When the Index Calculation Agent determines that the volatility of the Index has exceeded the maximum volatility target (the "Maximum Volatility Target") of 10.00%, then the exposure of the Index to certain of the Index Components will be reduced and a corresponding portion of the Index will reference money market assets, with the aim of maintaining the volatility of the Index below the Maximum Volatility Target.
However, such volatility adjustment feature may lead to a realized volatility which is lower than or exceeds the Volatility Target.