AGF Funds Inc. today launched Business Development Bank of Canada FULPAY AGF Funds-Linked Notes, the first notes available in Canada that are linked to the performance of three AGF mutual funds. The notes go on sale today until February 14.

The notes have a 6.25-year term and guarantee return of principal at maturity, while offering variable interest linked to the total returns of a conservative, balanced blend of Canadian funds.

The linked notes are available in $1,000 increments with a $5,000 minimum investment and are RSP eligible. The Business Development Bank of Canada (BDC) carries an AAA credit rating.

“Investors today want exposure to potential growth in the markets, but they are also keeping an eye on the safety of their original investment,” said Clive Coombs, executive vice-president, AGF. “Now we can offer them the upside potential without the downside risk.”

Investors in BDC FULPAY AGF Funds-Linked Notes can benefit from the combined total returns of an equal investment in AGF Canadian Stock Fund, AGF Canadian Conservative Income Fund and AGF Canadian Dividend Fund.

For example, for all 6.25-year rolling periods maturing on sequential month-end dates from July 1997 to December 2002, the notes would have returned an average of 7% compounded annually.