Principal Protected Notes
Tradex also distributes a limited number of Principal Protected Notes (PPNs). PPNs are offered by a number of institutions and come in a great variety of “shapes and sizes”. In general, Tradex distributes only those PPNs offered by major financial institutions, including:
- Bank of Montreal
- Royal Bank of Canada
A Principal Protected Note, or PPN, is an investment
product that consists of two parts. One part is an
investment that promises a return of the original amount
that you invest in
the PPN, usually after a six to ten year period. A third party, called the guarantor,
guarantees the amount you will receive. The second part of the PPN is a market-based
investment, usually linked to a market index, a fund, or another investment product that
offers the potential – but not a guarantee – of a profit on your investment.
The attraction of PPNs is that investors can have the principal amount of their investment
guaranteed and still have the prospect of earning a rate of return above what might be
provided by a GIC or other investment providing a fixed return.
As the terms and conditions of each issue of PPN vary significantly, it's important to review
in detail the actual terms of an offering before investing. Our Senior Advisors are well versed
in this area and are able to assist steering clients towards appropriate options.
For more information about PPNs (including the potential downsides of investing in them as well as the advantages),
click here to read a summary on PPNs produced by the Canadian provincial securities commissions (CSA).
To learn more about investing in Principal Protected Notes call us at 1-800-567-3863