Skylon Advisors Inc. today announced the launch of Series 3 of the Skylon Pro-Tracker and Skylon Pro-Tracker R.O.C. Deposit Notes. The notes combine principal protection provided by Bank of Montreal with the growth and income potential of a basket of income trusts.
As with Series 1 and 2, the new notes feature an allocation strategy that provides the potential for up to 200% exposure to the underlying basket of 72 income trusts that are included on the S&P/TSX composite index.
This strategy enables the note to maximize returns in rising markets and reduces volatility in declining markets. Investors will receive monthly distributions equivalent to 75% of the underlying basket’s ordinary distributions with the remaining 25% being reinvested.
For the Pro-Tracker Deposit Notes, the principal protection at maturity is not reduced by the distributions, while distributions from the Pro-Tracker R.O.C. Deposit Notes will be paid out in the form of a tax-deferred return of capital.
“Income trusts have outperformed over the past five years and remain a solid choice for investors looking for a stable income source,” said David McBain, president and CEO of Skylon Advisors. “The Pro-Tracker Deposit Notes provide income alternatives for registered and non- registered accounts along with the security of knowing that your principal is protected.”
The income trust portfolio will be rebalanced on an ongoing basis to reflect official changes in the index constituents as well as to maintain an approximate equal weighting exposure to the income trusts within the long-term portfolio.
The Pro-Tracker and Pro-Tracker R.O.C. Deposit Notes have a 9.5-year term and are fully eligible for registered plans. Series 3 is available from most financial advisors until March 10, 2006. The issue price is $100 per note, with the minimum investment being $2,000.