BMO Nesbitt Burns has hired Luke Seabrook and Duncan Marks to lead the firm’s newly created Equity Linked and Mutual Fund Linked Products Group.

Seabrook becomes Head of Equity Linked and Mutual Fund Linked Products and together with Marks, they will develop non-proprietary products, both principally protected and non-principally protected, for the retail and institutional marketplace. These products will offer exposure to various payoff structures and assets including mutual funds, income trusts and equities.

BMO Nesbitt Burns also announced the launch of the Franklin Templeton Investments bestLINK Protected Note – Income Trust Class – Series 1. The note has a five-year term of maturity and is principally guaranteed at maturity with performance linked to the Bissett Income Fund Series A. Issued by the Business Development Bank of Canada, the payment of principal and any interest on the notes will be guaranteed by the government of Canada.

“We believe linked products provide investors with a meaningful alternative,” said Seabrook, in a release. “There is a large investor audience who are not willing to risk their principal but are dissatisfied with the current level of interest rates paid on low risk investments.”

“Most investors who purchase these investments are looking for potentially higher returns, but also want the safety net of protecting their capital,” added Marks.

Equity linked notes have the ability to offer broader diversification without risk of principal at maturity. In addition, there is potential for these products to outperform current low risk fixed income investments such as GICs and money market funds by way of participation in actively managed equity exposure, while not sacrificing principal.

Linked products currently represent assets of about $4 billion in Canada, according to Investor Economics, a Toronto-based research firm, which tracks trends in the wealth management industry. More than half of the sales of these products have occurred over the last two years with most being notes linked to mutual fund and hedge fund assets. The term on most equity linked products usually range from five to 10 years.

Seabrook and Marks were previously executive directors of Equity Structured Products at a competing firm where they specialized in creating such products. Prior to that, Seabrook was vp, financial institutions for Citigroup in Toronto and Marks spent eight years as a vp in BMO’s Equity Derivatives Group.