Fixed dividends stock

Fixed dividend stocks are underlying assets of the 'live security with contractual dividends' type. Their goal is to create a synthetic underlying that fixes the dividend level of an existing security for the entire life of a product. This allows the issuer to have visibility on the future dividends of the underlying since it is no longer subject to possible changes in the company's dividend policy. Thus, it can offer more attractive conditions to the investor.

As a general rule, issuers base themselves on the dividends historically distributed by companies in order to establish these underlying assets.

In the case where the dividend is set at the current level of the actual dividend, the price of the contractual dividend security will outperform the price of the existing security if the level of dividend paid increases in the future and on the contrary will underperform the price of the security existing in the case where the level of dividend paid declines over time.