ONE Financial has launched Series 2 of the All-Star Portfolio Notes, a debt instrument with the potential to deliver equity-like returns through a link to the performance of some of Canada’s top-performing mutual funds.

The notes offer the potential for enhanced performance, are 100% principal protected and provide a guaranteed minimum return of 7% at maturity.

“We’re offering investors who want capital protection and the potential for enhanced equity-like returns, an investment with two features that are very unique in the industry. The first is a ‘double guarantee’: we guarantee investors 100% of their principal, plus a minimum 7% return at maturity. And secondly, we have provided a very innovative structure that offers an investor in the notes the potential to actually outperform a direct investment in the notes’ underlying investment portfolio,” said Jeffrey O’Brien, CEO of ONE Financial.

The notes are available through advisors until November 14 for a minimum investment of only $2,000. The product features a principal guarantee from BNP Paribas, and a diversified portfolio of underlying investments comprised of five mutual funds.

The funds include: CI Global Fund; AGF International Value Fund; AIC American Focused Fund; AIC Diversified Canada Fund; and CI Canadian Bond Fund.

When the notes mature, in approximately eight and a half years, investors will receive their principal plus the interest generated by the notes’ link to the five underlying mutual funds. Unlike other equity-linked notes, however, if the underlying funds perform well then the Notes have the potential to provide investors with an interest payment even greater than the performance of the underlying funds.

In the event the funds do not perform well, investors are still guaranteed a 7% minimum return on their invested capital at maturity. The notes also offer a tax-efficient structure that defers taxes on portfolio growth by avoiding interim distributions.

The notes qualify as Canadian content for registered plans.

For investors who wish to sell the investment at any time prior to maturity, ONE Financial and BNP Paribas intend to facilitate a weekly secondary market for the notes. They are not, however, under any obligation to do so. Under certain circumstances such sales will be subject to an early sales charge.