AGF Trust Company today launched the AGF Trust Mutual Fund Linked GIC, which offers investors the opportunity to participate in 65% of the market gains from three AGF mutual funds.

“They are ideal for investors who want the protection of a traditional GIC but are looking for a higher return on the cash component of their portfolio,” said Mario Causarano, president and chief operating officer, AGF Trust Company, in a news release.

The five-year GICs pay a guaranteed 5% at maturity. In addition, investors may benefit from 65% of the total returns from AGF Canadian Stock Fund, AGF Canadian Conservative Income Fund and AGF Canadian Dividend Fund over the five-year term to maturity, based on the three funds’ closing levels for the last 24 months of the term.

As an example, for all five-year periods maturing on sequential month end dates from April, 1996 to December, 2002, the AGF Trust Mutual Fund Linked GIC would have returned an average of 6.9% compounded annually. The minimum investment in the linked GIC is $2,000.

Last week, AGF launched Business Development Bank of Canada FULPAY AGF Funds-Linked Notes, another product that combines capital protection with the returns of the same three Canadian funds.