Transcript: CIBC Structured Notes


[Title Name: Roni Taza – Director, Wealth Solutions Group, CIBC Capital Markets.]

[Music plays.]

[CIBC logo.]

[Roni sits at a desk and speaks.]

Roni Taza: If you're interested in investing with exposure to the markets, but fear the potential risks that come along with it?

I'm here to tell you about a possible alternative to stocks, bonds, mutual funds and GICs. That’s structured notes.

[CIBC logo. Structured Notes.]

[A bulleted list titled: Structured Notes. Bullet points: Investments that provide Market exposure; Embed downside protection.]

Structured notes are investments that provide market exposure and can embed some degree of downside protection depending on the type you choose.

[Graph titled: Linked to a variety of underlyings. The line is named: S & P 500. The line moves erratically up and down, but with a basic upward trajectory.]

[Graphic of a target with a checkmark in the bullseye. Around this target are three icons of bar graphs.]

Notes can be linked to a variety of underlines, including benchmark indices like the S&P 500 or a portfolio of shares.

[Graphic titled “Payouts” is shown. Beneath this is a bulleted list: Periodic cashflow; Growth option. An icon appears beside the listing of a dollar with an arrow curving up beneath it. This icon changes to an icon of a coin with an up arrow.]

[A woman works on her laptop.]

[Graphic of an open laptop. On the monitor is an icon of a shield and another with three arrows pointing up. These change to graphics of binoculars and a gauge. Beside this the following is shown: 0%, which then counts up to 100%.]

They can offer a variety of different payouts, including ones that provide periodic cashflow or a pure growth option.

With so many options to choose from, you can select the note that has the amount of downside protection you're comfortable with.

The different levels of protection can range from 0 to 100%.

[Beside Roni, the following information is shown: 100%. Below this the following appears: Your original investment is protected if held to maturity.]

100% means no matter what happens to the market, your original investment is protected if held to maturity.

[The above changes to: 0%, with the following information below: You have full downside risk if the market goes down.]

0% means you have full downside risk if the market goes down.

That's like your investment in stocks today.

[Graphic appears, titled: Principal at Risk Note with Protection Level. Below is a line graph that has a downward trend. The beginning point of the line is titled: Initial investment. Information below a specific line is titled: Protected principal. The area between the initial investment and the protected principal is a loss. The end point on the line graph is titled: Maturity.]

If you're buying a note that offers less than 100% protection, as long as the market doesn't go down by more than your protection level at maturity, you know your investment will be safe.

[Information appears beside Roni: Could lose some or all of your original investment.]

And if the market goes down further than your protection level at maturity, then you could lose some or all of your original investment, depending on the extent of negative performance.

[Graphic titled: Downside Protection. Icon of a shield. This changes to: How does downside protection impact your upside potential?]

Downside protection. Sounds like a nice feature, right? But you're probably wondering how this impacts your upside potential.

[This in turn changes to: Upside potential for structured notes.  The following bullets appear below: May include a performance cap or have a reduced participation rate; They are term investments that should be held for their full term.]

On the upside, notes have a couple of features that make them different from a direct investment.

They can include a performance cap or a reduced participation rate that could limit your return relative to a direct investment.

They’re also term investments that should be held for their full term, typically five years or less.

So although these features make them different than a direct investment, they're also the features that allow the principal-protection feature to be available.

[Make sure you read the terms of the note to know and understand what you are buying.]

As with all investments, it’s always important to read the terms of the note, so you know and understand what you’re buying.

[Principal at risk notes. The following bullet appears underneath: You can still lose some or all of your original investment if the market goes down more than your protection level at maturity.]

[Graph titled: Principal-Protected Note or MLGIC. The graph line has an upward trajectory. The starting point is named the Initial investment value, and starts at the Initial investment date. A dotted line is made in a straight line to the end or Maturity date. The top-most point of the graph at Maturity date is highlighted and that top point then moves down to the initial investment value point.]

If you're buying a Principal-at-Risk note, you could still lose some or all of your original investment if the market goes down more than your protection level at maturity.

And if you're buying a Principal-Protected note or a Market Linked GIC, they offer upside potential, but there is the possibility that no return is paid for the term.

That's based on market performance and something you need to think about versus buying a GIC or other investment that offers a guaranteed return of some kind.

[A graphic showing the following bullets: MLGICs are non-redeemable; MLGICs are eligible for CDIC Insurance.]

[A woman types on a laptop while outside.]

You also need to know that Market Linked GICs are non-redeemable and that Market Linked GICS are eligible for CDIC insurance, up to applicable limits.

Whereas Principal-at-Risk notes and Principal-Protected notes are not.

There are a lot of options, and a lot of great information available about structured notes.

[To learn more visit the Investor's Edge site and click on ‘Learn’ and then enter ‘Structured Notes’ in the search field.]

[CIBC logo. The CIBC logo is a trademark of CIBC. CIBC Investor’s Edge is a division of CIBC Investor Services Inc. S&P 500® is a registered trademark of Standard & Poor’s Financial Services LLC and has been licensed for use by CIBC.]