Changing market conditions shouldn’t mean you have to change your ambitions. In an environment of low interest rates, market volatility and a stock market near record highs, you may be wondering how you could enhance your portfolio’s income and growth potential.

Structured notes may be one way. These innovative investment solutions allow you to benefit from some of the protection and income potential of bonds plus some of the growth potential of equities. They may include features tailored to specific time horizons, cash flow needs, market views and risk tolerances—helping you increase the probability of meeting your unique investment objectives.

Let’s take a closer look at structured notes.

Investment solutions that start with your goals in mind

Structured notes are hybrid investment products issued by a bank. Returns are based on the performance of one or more underlying reference assets. These may be conventional assets like equities and equity indices, or they may be assets not readily available to individual investors, such as commodities, interest rates, currencies or alternative investments.

Structured notes generally fall into two main categories:

1. Principal protected notes (PPNs). Like a traditional GIC, PPNs offer 100% principal protection at maturity while providing investors with increased return potential based on the performance of a variety of asset classes, including equities, equity indices and interest rates. They may be suitable for investors who value 100% principal protection at maturity and want to potentially earn higher returns than fixed-rate GICs or high-interest savings accounts.
2. Principal at risk notes (PARs). These notes may be suitable for those already investing in mutual funds, ETFs or stocks who are comfortable with some level of downside risk. They may provide an opportunity for enhanced yield/income and growth, and may also provide certain levels of partial or contingent principal protection. PARs may be used by clients seeking yield-enhancement strategies to outperform traditional fixed income and term deposits, or by investors seeking outperformance potential in various market environments.

You can learn more about structured notes by visiting the CIBC Capital Markets education centre. Let’s connect to see how structured notes can fit into your investment portfolio.