Growth Notes in Canada
Growth notes let you participate in the upside of an underlying index (e.g. the S&P/TSX 60) at a specified participation rate, while a downside barrier protects your principal if the index declines moderately. If the index finishes positive, you earn a return. If it finishes negative but above the barrier, you get your money back. If it breaches the barrier, you're exposed to losses.
Return Profile
For illustrative purposes only. Actual returns depend on specific note terms.
How It Works
At maturity, your return equals the index gain multiplied by the participation rate (e.g. if the index is up 10% and participation is 110%, you earn 11%).
If the index finishes positive, you receive your principal plus the participation-adjusted gain.
If the index finishes negative but stays above the barrier level, you receive your full principal back with no loss.
If the index finishes below the barrier at maturity, you lose proportionally to the index decline.
Investor Suitability
- Growth-oriented investors who want equity exposure with some downside cushion
- Moderately bullish on the underlying index
- Comfortable with price volatility and no interim income
- Medium- to long-term holding period
- RRSP, RRIF, RESP, and TFSA eligible
Investment Considerations
- Does not pay income - not suitable if you need regular cash flow
- Barrier protection only applies if you hold to maturity
- You give up dividend income from the underlying index
- Payments depend on the issuing bank's creditworthiness
- Selling before maturity on the secondary market may result in a loss
- Early trading fees may apply
- Taxed as interest income outside registered accounts
- Not covered by CDIC deposit insurance
Currently Available (10+)
Other Structure Types
For educational purposes only. Not investment advice. Information may contain errors or omissions. Consult a qualified financial advisor before making investment decisions.
