National Bank is launching the Canadian Blue Chip Portfolio-Linked Note, a product that can produce excellent returns while guaranteeing the capital invested.

Investors who opt for this product, which sells for $100 per note, can benefit from the increase in value of a basket of 20 Canadian blue chip stocks. At maturity in 2010, investors will be entitled to receive a minimum of $100 per note, plus the increase in the value of the benchmark portfolio, which is unlimited ($100 X the value at maturity divided by the initial value).

In addition, National Bank can redeem the notes at its discretion half way through the seven-year term for a price of $135, which represents an annual compound return of 8.95%. As well, the note can be sold one year after the purchase date at market value.

“In today’s market, this note should appeal to investors looking for security as the capital is guaranteed. What’s more, if the notes are redeemed after 3 1/2 years, investors are assured of obtaining an 8.95% return, which is more than double the rates currently offered on three- and four-year GICs,” said Jean Blouin, vice president, retail credit and investment solutions at National Bank of Canada.

The basket of securities is weighted as follows: natural resources (18%), pipelines and utilities (8%), industrials (7%), banks (47%) and communications (20%).

The notes can be included in RRSPs, RESPs, and RRIFs. All fees have been worked into the structure and no management fees are charged on the benchmark portfolio.

The product can be purchased through National Bank branches or representatives at National Bank Financial and National Bank Discount Brokerage.