A PPN is an investment product that consists of two parts. One part is an investment that promises a return of the original amount that you invest in the PPN, usually after a six to ten year period. A third party, called the guarantor, guarantees the amount you will receive. The second part of the PPN is a market-based investment, usually linked to a market index, a fund, or another investment product that offers the potential – but not a guarantee – of a profit on your investment. The attraction of PPNs is that investors can have the principal amount of their investment guaranteed and still have the prospect of earning a rate of return above what might be provided by a GIC or other investment providing a fixed return.
Tradex distributes a limited number of PPNs. PPNs are offered by a number of institutions and come in a great variety of “shapes and sizes”. As the terms and conditions of each PPN vary significantly, it’s important to review the terms of an offering before investing. Our advisors are well versed in this area and are able to help you find appropriate options.