Pro-Hedge launches deposit notes

Date: Wednesday, February 8, 2006
Author: Advisor.ca

Pro-Hedge Funds alternative investments has added a new structured product to its lineup. The Pro-Performance Blue Chip Yield Deposit Notes, available for sale until March 31, 2006, invest in a portfolio of 30 stocks, picked from the Dow Jones Global Titans 50 Index.

The structured product offers 100% principal protection at maturity, guaranteed yields of 6% in the first year and 5% in the second year, then a variable yield of up to 10% annually, based on the portfolio's average performance. The note also uses a locking in feature — once a share's performance equals or exceed 5%, the performance of that share for current and all future coupon calculations will be locked in at 5%.

The company says it will facilitate a weekly secondary market for the notes after October 1, 2006 for clients who wish to redeem their notes. Early sales charges start at 5% of the principal investment, charged between October 1, 2006 and September 30, 2007, and decline 1% each year until September 30, 2011.

Although the company intends to create this weekly market, the note's information statement says neither the note administrator (Pro-Hedge) nor the bank (BNP Paribas, the guarantor) are under any obligation to do so or continue providing the service if the secondary market is suspended or discontinued. The notes are RRSP eligible, have no management fees and pay advisor commissions of 4%. Minimum investment is $2,500.