Executive Summary:

I’m extremely excited to share with you this new investment I was able to design with my colleagues at Scotia Global Banking and Markets. The ability to do this type of thing is quite unique to us, how we’re licensed and various other factors, so I thought it was (at the risk of sounding like I’m bragging) worth sharing with you.

This investment will return a guaranteed 150% of the upside (positive) TSX60 return. Yes, more than what the index itself does in a positive market environment. So, if it’s up 10%, we’ll be up 15%. Yet, despite that upside performance, we also we have the downside “buffered” (with protection built in) on the first 20% decline. Yes, that’s right…we don’t go down on the first 20% slide in the Canadian market.

Intrigued? Read on and you’ll learn more.

The Details:

Recently, we sold a major Canadian Equity ETF in order to replace it with this new investment as we really wanted more downside protection. We created this custom-to-us-alone investment that has exposure to the equity market but also has downside protection built into it and it’s backed by Scotiabank. This investment will return a guaranteed 150% of the upside (positive) TSX60 return (so if it’s up 10%, we’ll be up 15%) and yet we have the downside “buffered” (with protection built in) on the first 20% decline. So if the market is down 10%, we’re not down at all. If the market goes down 25%, we’d be down 5%. Using my relationship with contacts at the bank I was able to design all the terms of this investment – so it’s custom for me and my clients alone – and I’m quite excited about it and how it will help produce solid returns yet give protection if a market correction is around the corner.

Below is a graph of the return profile:

Also, note its 100% liquid so we can sell at any time for any client if they need money. There is also no commission paid on trades or commission paid to me to design it. There is no ongoing or embedded management fee either.

The catch you might wonder? It’s not really a catch…the bank uses the capital invested in their day-to-day operations (and we all know about fractional reserve lending right?). So it’s not segregated in a fund somewhere but they use it just like they use the money you deposit in your bank account…and well, they’re good at making lots of money this way. I believe this should be a profitable investment for them as well as for you.

Sounds great, right? If you have questions or would like to use this further in your accounts with me (with new investment money, as available), please contact me. I look forward to discussing it further.