One Star Effect

The One Star effect is a protection enhancement used mainly in multi-underlying autocallables.

In a standard worst-of product, capital protection at maturity usually depends on the worst-performing underlying.

With a One Star feature, even if the worst-performing underlying breaches the capital barrier, the investor may still receive 100% of capital back if at least one underlying finishes above a predefined “One Star trigger”, usually 100% of its initial level.