Have you ever heard of trust units? Thanks to the Trust Plus ActionGIC, you could enrich your portfolio with an investment tool that is growing in popularity among investors, while fully protecting your capital.
What is a trust unit ?
Some companies constitute a trust and publicly issue their units. Akin to shares, trust units are traded on the stock exchange. Companies that issue units have stable and predictable revenues, of which they distribute a portion to investors rather than reinvesting in the company.
Diversific ati on and hig her potenti al for return
The Trust Plus ActionGIC offers a very attractive potential for return. The graph below represents the return of our past issues compared to key market indexes.
| TRUST PLUS ACTIONGIC1 RETURN COMPARED TO S&P/TSX 602, S&P 500 AND BAI.U SINCE APRIL 2003 |
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| CHARACTERISTICS | |
|---|---|
| Minimum investment | Non registered investment: $1,000 RRSP: $500 |
| Terms available | 5 years |
| Maximum rate of return | None |
| Eligibility to a registered plan | RRSP only (not available to RRIFs and LIFs) |
| Access to capital | No possibility of repurchase |
| Interest payments and taxable interest | Interest cannot be declared yearly since the return amount is known only at expiry. Therefore, interest becomes taxable in the year the investment matures (outside the RRSP). |
Summary
This investment product is suited for you if:
- You seek an investment vehicle that protects the initial amount of your investment;
- You are seeking for high potential of return on investment, better than conventional deposit products;
- You wish to take advantage of return potential of trust units, without risking your initial investment;
- You wish to diversify your portfolio;
- You seek an actively managed investment product.
This investment product is not suited for you if:
- You anticipate the need to access your capital on short notice;
- You prefer to be aware of your return on investment from the outset.
An actively managed portfolio
The Trust Plus ActionGIC is a fully-secured investment whose rate of return is based on the performance of a privately managed trust unit portfolio. A major portion of the GIC is concentrated in real estate and energy given that trusts are numerous in these sectors (see graph below).
| COMPOSITION OF THE TRUST PLUS ACTIONGIC3 |
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The portfolio is actively managed and regularly re-evaluated for maximum performance. Companies are carefully selected and must meet rigorous selection criteria. Such units must:
- have been traded for several years;
- have a market cap exceeding $125 million;
- offer an expected distribution over 9%;
- be Canadian.
A Trust Plus ActionGIC is most certainly the wisest approach to capitalize on this potential for growth in your portfolio, while fully protecting your capital.
Diversification and higher potential for return.
Legal notice
1. Returns correspond to cumulative returns as at January 31, 2005 of Trust Plus ActionGICs issued on April 11, 2003, April 23, 2004 and July 16, 2004. Because the issued GICs have a maturity date of April 11, 2008, April 23, 2009 and July 16, 2009, the return on investment could be lesser or even nil by the maturity date. The final return of the Laurentian Bank Trust Plus ActionGIC is calculated based on a percentage of the reference index performance between the issue date and the maturity date. The starting index at issue is established using the closing quote of the reference index on the issue date. The index at maturity is calculated using the closing quote of the reference index ten business days before the maturity date. If the total return is negative of nil, the fully secured principal amount shall be paid on the maturity date, but
no interest shall be paid. If the total return is positive the interest less certain portfolio management fees, shall be paid only upon investment maturity as the rate of return is only know at maturity. Past performance may not be repeated. Details available in branch.
2. “Standard & Poor’s®“ and “S&P®” are trademarks of The McGraw-Hill Companies Inc. “TSX” is a trademark of the Toronto Stock Exchange. The Laurentian Bank and B2B Bank obtained a license for use of these trademarks. The products are not sponsored, endorsed, sold or promoted by Standard & Poor’s or the Toronto Stock Exchange. None of those parties makes any claim, guarantee or stipulation regarding the opportunity of investing in the product.
3. Composition of the first issue of the Trust Plus ActionGIC at April 30, 2005
