What Is a Tracker Certificate?

Introduction

A Tracker Certificate is a structured debt instrument that replicates the performance of an underlying asset or custom basket on a 1:1 basis. The issuer - which may be a bank, a securities dealer, or - such as is the case with SMART - a special purpose vehicle (SPV) - packages the performance of the defined underlying into a single, tradable security.

The defining characteristic of a Tracker Certificate is that the composition of the underlying is static or rules-based: it is defined at launch and does not change at the discretion of a portfolio manager. The underlying can be a single entity, bespoke basket, or a commodity - what it cannot be is actively managed. That distinction separates the Tracker Certificate from an AMC.

A Tracker Certificate is a debt instrument: the investor is a creditor of the issuer, not a co-owner of the underlying. It receives its own Swiss ISIN, settles through SIX SIS, and sits in a standard custody account alongside equities, bonds, or any other holding. There is no fund wrapper, no prospectus requirement, and no FINMA fund approval.

Tracker vs. ETF

Both a Tracker Certificate and an ETF provide exposure to an underlying. The differences matter in practice. An ETF is a regulated collective investment scheme: it requires FINMA approval, must track a publicly known rules-based index, and can take months to years to launch. A Tracker Certificate is a debt instrument that can be structured and issued in a matter of weeks.

Pricing is straightforward: the daily value of the certificate equals the current market value of the underlying entity or basket, adjusted for any accrued fees. Unlike an AMC - where the Product Manager must be a FINMA-regulated asset manager - the product manager of a Tracker Certificate may be an unregulated entity, reflecting the absence of discretionary portfolio management in the product's ongoing lifecycle.

Pricing is transparent and performance attribution is simple: the certificate returns exactly what the underlying returns, minus fees. There are no discretionary decisions to account for, no deviation from the stated composition, and no active manager whose judgement introduces a variable into the return.

Issuer Structure

SMART Tracker Certificates are issued by Smart Edge PCC Limited, an off-balance-sheet special purpose vehicle incorporated in Guernsey as a Protected Cell Company.

As the issuing vehicle is off-balance-sheet: the assets referenced by each product are legally separate from Onvest AG and from each other. An investor's claim is against the collateral held within the relevant structure, not against Onvest AG as a corporate entity.

Tracker vs. AMC

The fundamental difference between a Tracker Certificate and an AMC lies in the nature of portfolio management. A Tracker Certificate has a fixed or rules-based underlying: the composition is defined at launch and changes only according to pre-agreed rebalancing rules or in response to corporate actions. The composition is transparent and disclosed in the termsheet.

An AMC allows the Product Manager to exercise full discretionary judgment over the portfolio at any time - buying, selling, and reweighting positions within the parameters set in the termsheet. Because the Product Manager makes ongoing investment decisions, they must be a FINMA-regulated asset manager under Art. 17 FINIG (or comparable in foreign jurisdictions). This makes AMCs suitable for active investment strategies where market conditions require ongoing portfolio adaptation and where a licensed manager is both available and appropriate.

The SMART platform supports both formats: Tracker Certificates for static, systematic or rules-based strategies where the composition is fixed and transparent, and AMCs for discretionarily managed strategies where the Product Manager requires ongoing flexibility.