Technology Index-Linked GIC - Average Annual Return: 5.51% | Page 2 | Meridian Credit Union | Discussion forum

Bill said
It tells you how the 5.51% is calculated, i.e. over 200 monthly periods, looking back 5 years each, starting sometime in 2001 (check out the specifics in the downloadable pdf on the site).

Swings are irrelevant, average return is - e.g. 0%, 2% and 8% over 3 years (i.e. outcomes below the average 67% of the time) still beats 3 years of steady 3% each. You can do what you want with numbers, true, but average of 5.51% still beats any lower number average no matter how wild the ups and downs.  

I can only find one downloadable pdf about the Tech GIC, called "Fact Sheet". While it does give a formula about how the return would be calculated, it does not give any results of actual past performance.

For most of their other index-linked GICs, they have an additional pdf which does show actual returns. It's called "Performance Results". If you have located this for the Tech GIC, could you please post the link? thx.

I can find no Performance Results or past performance data for this product, presumably because it's new.

The Fact Sheet says "Compound annual returns over the term of the product were calculated by applying the current features of the guaranteed investment over the last 200 5 year periods ending each month between July 31, 2001 and February 28, 2018." That's all I've found.

Top It Up said

For greater clarity, if Meridian's offering was an unencumbered offering, the return would blow the doors off a silly 3.5% 5-year GIC - guaranteed.  

That is an IF that simply doesn't apply, thus irrelevant. Nobody is arguing with you about that.

It's not that you aren't clear; it's that, in your ever-present eagerness to disagree with me, you didn't pay attention to what I actually said.

Going back 17 or so years makes sense to me, it was around 2001 when the majority of American households for the first time had internet access, thus marking in a way the beginning of the modern ubiquity of the online world that led to the rise of the tech giants we know and love today. I guess.

Actually the Fact Sheet wording suggests the first 5-year period ended July 2001 so the performance is actually measured back to beginning mid-1996.

No need to over analyze Meridian’s motive, banks typically makes about a few %on the principal amount in these equity linked notes, the financial advisor gets a cut (similar to mutual funds).
From investors’ perspective, do u want risk free 3.5% per year for next 5 years = 17.5% guaranteed return (simplified, ignore compounding), or willing to risk 0% but potentially gain max of 50% over same period ? There r different variations of these notes, discarding top n worse performers are typical. Other more exoctic notes may offer features such as ‘capping return’ of individual stock’s return once it’s reached. E.g max of any constituents to be capped at 50%.

Market Linked GIC's can be purchased by individuals under the age of 18 !!!!

Otherwise, minors are shut out of the equity market.