Investment Insights Structured notes

Understanding structured notes: Market Linked GICs

Find out how Market Linked GICs can let you tap into the growth potential of the market while protecting your initial investment.

CIBC Investor’s Edge Jul. 26, 2025 5-minute read

Structured notes are a type of debt instrument typically issued by a bank. There are 3 types that you can purchase on the Investor’s Edge platform:

Market Linked Guaranteed Investment Certificates (MLGICs)
Principal Protected Notes (PPNs)
Principal At Risk Notes (PARs)

MLGICs guarantee 100% repayment of your principal at maturity and provide a return that’s tied to the performance of a specified reference asset. In other words, they’re “market linked.”

What are Market Linked GICs?

First, what are the features of Guaranteed Investment Certificates (GICs)?

GICs earn a guaranteed return for a fixed term and typically can’t be redeemed until the end of the term, also known as the maturity date. Their rate of return is usually higher than a deposit account, which compensates investors for the liquidity sacrificed over the term. At maturity, investors receive 100% of their original investment, plus interest earned at the stated GIC interest rate — a rate established when the GIC is purchased. 

MLGICs also guarantee 100% return of principal at maturity. However, the interest payable on an MLGIC is tied to the performance of its linked assets over the MLGIC term, so the return rate can’t be determined until the end of that term or until the specified payment dates.

MLGICs can provide exposure to the performance of a variety of underlying assets, such as equities, equity indexes or interest rates. The market-link feature provides the potential, but not the guarantee, that MLGICs will outperform traditional GICs. But if the linked asset performs poorly over the term, an MLGIC may instead underperform traditional GICs.

Both GICs and MLGICs are eligible for CDIC insurance.

MLGIC key features

Principal protection: 100% principal protection at maturity
Income potential: Income-focused MLGICs offer the ability to receive cash flow through monthly or annual interest payments 
Growth potential: Growth-focused MLGICs have the potential for enhanced returns relative to fixed rate GICs
Liquidity: Must be held to maturity
Minimum investment: Minimum investment is $5,000
Fees: All fees and commissions are outlined in the Information Statement for each MLGIC, including an upfront selling concession payable to Investor’s Edge
CDIC coverage: CDIC eligible up to applicable limits

Key benefits and considerations

The total return of an MLGIC is determined at the end of its term, typically 2 to 5 years, based on the performance of its linked assets. When the performance of the underlying linked assets is negative, an investor receives only the principal amount invested or, in some cases, a specified minimum return.

There are different types of MLGICs with different payout structures:

Income-focused MLGIC

Interest is paid monthly or annually
Guaranteed minimum return and possible higher return based on performance of reference assets
100% principal protection at maturity
Income and growth
Annual interest payments
Variable return depending on performance of reference assets, payable at maturity
100% principal protection at maturity

Key considerations:

May generate cash flow from investments
May provide enhanced yield potential
May deliver a guaranteed minimum return
Value principal protection at maturity

Growth-focused MLGIC

No regular interest payments
Variable return payable at maturity
100% principal protection at maturity