AGF Offers Canadians Principal-Protected, Income-Producing Notes With Upside Potential
September 7, 2008
AGF Management Limited has launched deposit notes designed to offer investors reliable, inflation-adjusted retirement income with exposure to equities.
The notes offer potential tax advantages, principal protection, and growth potential based on the returns of the AGF Elements Portfolios. Investments in those underlying portfolios are automatically reallocated to a progressively more conservative mix over time.“As Canadians face longer retirements, they will continue to demand investment solutions that will provide them with guaranteed cash flow as well as protection against inflation,” said Randy G. Ambrosie, president of AGF Funds, Inc.
Fifteen-year and 20-year notes are available. The 15-year notes pay immediate monthly distributions at an annual rate of 6.6% of the initial principal. The 20-year notes offer monthly distributions starting in the sixth year at an annual rate of 6.6% of either the initial principal or the account value after five years, whichever is greater.
The portfolios underlying the notes have a high initial equity weighting and then shift to a more conservative asset allocation approach every five years. The starting allocation is 100% equity for the 20-year note. For the 15-year note, it is 80% equity and 20% fixed income.
“Investments in the AGF Elements RetirePlus Notes are not mutual fund investments,” a release from the bank said. “They are investments in principal protected deposit notes issued by Bank of Montreal and constitute direct, unconditional obligations of Bank of Montreal. Variable return, if any, at maturity is based on the Fund Portfolio Value (and notional fixed annuity) less deposit balance.
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