Market Index GIC

This is a very competitive investment opportunity. It guarantees your principal and has the potential for a great return. This investment is an ideal choice if you have the time to let your investment grow. If you don't need access to your funds for a 3 or 5-year period and you are willing to take minimum risk for a potentially higher return then read on.

 

What is Market Index GIC?

An Market Index GIC is a term deposit that pays a rate of return based on the performance of the S&P/TSX 60 stock market index while providing 100% principal guarantee. This product is your choice of a 3 or 5-year investment with the interest payable on the maturity date. Interest earned is based on the average of the monthly closes of the S&P TSX 60 Index for the selected investment period. Since the principal is 100% guaranteed, Members can take advantage of gains in the stock market with no downside risk.

 

Who Should Consider a Market Index GIC?

• Members who are looking for a deposit with a principal guarantee that offers the potential for a higher return than the return paid on fixed rate deposits.
  
• Members who are looking for an investment that carries no fees or commissions.
  
• Members searching for a diversified investment in Canadian corporations.
  
• Conservative individuals who are not willing to risk their initial investment.
  
• Members who are comfortable with investing their funds for a 3 or 5-year period.
  

Who Should Not Buy a Market Index GIC?

• Members who are dependent upon the current income from their investments.
  
• Members who may need their principal before the term of the deposit has expired.
  
• The Market Index GIC is not eligible as a RRIF, as the deposit is not redeemable prior to maturity and does not have a guaranteed rate of return. An RRSP Market Index GIC is available for Members under 67 years of age only.
  
  

Market Index GIC Features:

· Term:                              Your choice of 3 or 5 years
· Principal:                        Guaranteed
· Participation Rate:          3-year terms at 50% (as of March 1, 2009), 5-year terms at 100% (as of August 10, 2009).

                                         Participation rate is used to calculate the average monthly closing value.
· Redemption:                   Only at maturity
· Minimum Investment:    $500 - RRSP, $1,000 - Non-registered
· Calculation:                    Average of the S&P/TSX 60 monthly closing values
· Interest:                         Paid at maturity
· Fees:                               Investment is not subject to any fees
· Insurance:                      Deposits in registered savings plans are fully insured. Other Canadian dollar deposits insured up to     

                                         $100,000.*

 

*For further information on deposit insurance, please ask for a brochure at the credit union or call DICO at 1-800-268-6653 or log on to the website at www.dico.com.

 

                                       

Member Benefits:

100% Principal Guarantee. Regardless of the performance of the S&P/TSX 60 Stock Index, the principal investment is fully guaranteed. Members will not lose any of their original investment, even in a significantly declining market.

Higher Potential Return Versus Traditional GICs. Compared with term deposit rates over the past 12 months, the historical returns of the S&P/TSX 60 Index demonstrate an earning potential that is notably greater.

Diversified Investment. The S&P/TSX 60 Index is a well-diversified portfolio made up of 60 large publicly traded Canadian companies.

Method of Calculation. Interest earned will be based on the average return of the Index for the 3 or 5 years of the investment period. The average is calculated by adding the Month-End Closing Values of the Index for 3 years (36 months) or 5 years (60 months) and dividing the sum by the Total Number of Months. This average is then compared to the Opening Value of the Index to determine the percentage change. The averaging protects the investment from severe short-term market fluctuations.

Risks

Unlike other term deposits, there is no guaranteed return on this product. Depending on the performance of the stocks comprising the S&P/TSX 60 Index over the term, it is possible that, at maturity, the investor will receive only their principal back.

 

Market Index GIC 2009/2010 Sales Periods

3-Year Market Index GIC
Sales Period Begins	Sales Period Ends	Index Set Date
March 2, 2010	May 31, 2010	June 8, 2010
June 1, 2010	August 31, 2010	September 9, 2010
September 1, 2010	November 30, 2010	December 8, 2010

 

5-Year Market Index GIC
Sales Period Begins	Sales Period Ends	Index Set Date
April 26, 2010	May 28, 2010	June 3, 2010
June 7, 2010	July 9, 2010	July 15, 2010
August 16, 2010	September 17, 2010	September 23, 2010
September 27, 2010	October 29, 2010	November 4, 2010
November 8, 2010	December 3, 2010	December 9, 2010
December 13, 2010	January 14, 2011	January 20, 2011
January 24, 2011	February 25, 2011	March 3, 2011

 

Click Here to see the Performance of your 3-Year Market Index GIC

Click Here to see the Performance of your 5-Year Market Index GIC

 

 

5-Year Market Index GIC Historical Performance
Maturity Date	Compound Return
March 5/09	7.22%
April 15/09	7.84%
May 27/09	8.95%
July 8/09	8.91%
August 19/09	9.24%
October 8/09	7.91%
November 18/09	7.58%
December 31/09	7.30%
January 27/10	7.46%
March 10/10	6.32%
April 21/10	6.89%
July 14/10	5.01%