If you are looking for a potentially profitable and risk-free investment, I invite you to invest part of your savings in the new stock exchange bond from Épargne Placements Québec.
Since it’s on sale until September 13th, you can choose between the 5-year term and the 10-year term.
Épargne Placements Québec reports to the Ministry of Finance and is responsible for marketing a range of savings products offered by the Government of Quebec to the general public with the aim of financing the province’s debt.
The return on these “exchange bonds” is based on the performance of the Quebec 30 Index (IQ-30), which is composed of the 30 major Canadian companies listed on the Toronto Stock Exchange and headquartered in Quebec. We find National Bank, BCE, CN, CGI, Alimentation Couche-Tard, Power Corp, Royal Bank, Bank of Montreal, Bombardier, Quebecor, CAE, Dollarama, IA Financial Corporation, Laurentian Bank, BRP, Air Canada, Boralex, Saputo , subway etc.
ADVANTAGES
The two main benefits of this investment? Firstly, in the event of a poor stock market performance of the IQ-30 index, investors are guaranteed that they will receive back all of the capital originally invested at maturity.
Second, the 40 issues that have matured so far have all paid off: 25 of them achieved an annual return of between 8% and 12.7%; five others achieved annual returns of 7% to 8%; five from 6 to 7%; four from 4 to 6%; one to 1%.
Another fact worth highlighting: of the forty issues in progress since September 2013, 36 show progress. The other four are currently vegetating at 0%!
There is nothing to envy at the checkout
If that can reassure you, know that the performance of the Quebec government’s securities is on par with the performance of the Caisse de dépôt et placement du Québec.
As of June 30, the 5-year annualized returns of the Caisse’s eight largest depositors ranged from 4.4% to 6.8%. And over 10 years, their returns have fluctuated between 6.5% and 8.9%.
The two bond issues due last June each achieved a 5-year annual return of 6.03% and an attractive 10-year annual return of 9.24%.
However, the yield on the new issue of 5-year exchange bonds beginning September 18 is subject to a maximum yield of 60%, which corresponds to a potential annual return of 9.9%. And the return on the new issue with a 10-year term is limited to a maximum return of 200% or just under 12% on an annual basis.
TWO BIRDS WITH A STONE
When you invest with Épargne Placements Québec (ÉPQ), you help finance Quebec’s debt while benefiting from risk-free savings products with competitive returns compared to similar banking products.
And God knows the province’s debt is high. To finance it, the Quebec government’s current outstanding loans amount to the astronomical sum of $259 billion.
However, the PEQ savings products in circulation represent only a “small” portion of these Quebec government loans. A “relatively small” portion, I might add.
In fact, the various savings products issued by Épargne Placements Québec still have an outstanding amount of around $13.7 billion, or 5.3% of all government loans.
The ÉPQ futures products issued and guaranteed by the Government of Quebec include the following products:
- 10-year progressive interest rate bonds (average yield 4.03%)
- Fixed rate green bonds (4.25% over 5 years)
- Fixed rate bonds (4.75% over 1 year; 4.25% over 5 years; 4.15% over 10 years)
- Flexi Plus savings (4.25% payable at any time)
- Stock exchange bonds (issues in March, June, September, December)
NOTICE TO INTERESTED PARTIES
The requirements? There is no minimum amount for Flexi-Plus savings. For other products, the minimum spend is $100. The maximum amount? No less than $5,000,000!
Who can invest with Épargne Placements Québec?
The targeted investors include, if they are based in Quebec, natural persons (joint savers), partnerships or limited partnerships incorporated in Quebec, legal entities under private or public law incorporated under the laws of Quebec or Canada, and legal entities , acting as a trustee or representative of a trustee on behalf of an individual resident in Quebec, personal estates, foundations and personal trusts or non-profit organizations.
