Guaranteed Investment Certificates and Principal Protected Notes

Don’t like seeing your portfolio drop when the market pulls back?  You may be interested in Principal Protected Notes (PPNs).

The original investment that you put into a PPN is guaranteed by the issuer (usually a large bank or brokerage firm).  These funds are locked into the PPN for the term of the note.

The return that you receive from the note is typically linked to the performance of an index, a basket of stocks or commodities, or a mutual fund.  In some cases, there is a guaranteed minimum return, on top of the non-guaranteed variable return that the PPN is linked to. 

In some cases, there are Guaranteed Investment Certificates (“GIC”s) that pay interest based on the performance of an underlying portfolio, as is the case above.  These are sometimes referred to as market-linked GICs, and benefit from CDIC insurance coverage.  This means that in case of issuer insolvency, the federal government guarantees that you will receive your principal back, up to C$100,000.

We specialize in Principal Protected Notes and market-linked Guaranteed Investment Certificates that are shorter-term in nature (1-3 years), meaning your funds are not tied up for a long time.  In addition, some of these shorter-term notes have a minimum guaranteed return that is added to the underlying portfolio’s variable return.