{"id":1640,"date":"2025-05-19T12:00:17","date_gmt":"2025-05-19T12:00:17","guid":{"rendered":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/?p=1640"},"modified":"2025-07-04T16:29:21","modified_gmt":"2025-07-04T16:29:21","slug":"https-financialpost-com-investing-market-whiplash-structured-notes","status":"publish","type":"post","link":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/https-financialpost-com-investing-market-whiplash-structured-notes\/","title":{"rendered":"When riding the market whiplash, structured notes can smooth the journey"},"content":{"rendered":"

Martin Pelletier: These tools can flex with investment conditions, balancing growth and protection<\/p><\/blockquote>\n

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What a rollercoaster year it\u2019s been for global markets. Equity indices around the world were shaken earlier this year as escalating\u00a0U.S. tariff tensions<\/a>\u00a0triggered waves of uncertainty. Sharp declines and heightened volatility left investors scrambling for direction amid fears that a\u00a0prolonged trade war<\/a> could undermine global economic growth.<\/p>\n<\/div>\n<\/section>\n

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In a dramatic turnaround, however, equity markets have surged back into positive territory this month. The U.S. government\u2019s more conciliatory tone recently toward China provided long-awaited clarity on its trade stance, reinvigorating risk appetite and boosting investor confidence. Major indices responded with strong gains, reversing much of the earlier damage.<\/p>\n<\/div>\n<\/section>\n

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Yet while equity markets embraced the rebound, the bond market is telling a more cautious story. The U.S. 10-year Treasury yield climbed back to hover around 4.5 per cent last week, signalling persistent concerns around\u00a0sticky inflation<\/a>, ongoing fiscal excess, and the possibility that interest rates could remain elevated longer than expected.<\/p>\n<\/div>\n<\/section>\n

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This growing divergence between buoyant equity markets and defensive bond markets underscores the complexity of today\u2019s macroeconomic landscape. Investors are navigating a crosscurrent of shifting policy signals, geopolitical developments, and central bank uncertainty. It\u2019s a market that rewards adaptability more than certainty.<\/p>\n<\/div>\n<\/section>\n

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Understandably, many investors may feel tempted to head to the sidelines and wait for more clarity. But doing so runs the risk of missing out should equity markets prove correct in pricing in easing trade risks and resilient economic growth.<\/p>\n<\/div>\n<\/section>\n

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The truth is, no one knows for sure what comes next, despite the endless stream of bullish or bearish takes from market pundits.<\/p>\n<\/div>\n<\/section>\n

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That\u2019s precisely why we at TriVest Wealth Counsel continue to favour structured notes, especially within tax-sheltered vehicles such as\u00a0registered retirement savings plans<\/a>\u00a0(RRSPs) and\u00a0tax-free savings accounts<\/a> (TFSAs), where we often allocate up to 100 per cent in our clients\u2019 registered accounts. These strategies offer the ability to customize outcomes depending on market conditions, something traditional investments struggle to provide.<\/p>\n<\/div>\n<\/section>\n

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For instance, in today\u2019s environment, we recently partnered with a Canadian bank\u2019s capital markets division to create an \u201caccelerator note\u201d with a unique look-back feature. The note references a basket of large-cap Canadian stocks such as\u00a0TC Energy Corp.,<\/a>\u00a0Enbridge Inc.,\u00a0Canadian Imperial Bank of Commerce<\/a>, The Toronto-Dominion Bank, Agnico Eagle Mines Ltd., and Manulife Financial Corp., and runs over a three-year term. Six months from now it will lock in the lowest point for the basket since inception and provide 1.18x the upside from that level for the remainder of the term plus a 30 per cent downside buffer from that locked-in low. In other words, even if markets decline sharply over the next few months, investors could benefit from gains off that bottom with significant downside protection.<\/p>\n<\/div>\n<\/section>\n

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We have also issued a similar note in U.S. dollars with even more compelling terms: 1.55x the upside, thanks to higher U.S.\u00a0interest rates.<\/a><\/p>\n<\/div>\n<\/section>\n

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Structured notes can also serve as compelling bond alternatives for income-seeking investors. One strategy we have used recently is a \u201ccontingent income\u201d note on Canadian utility stocks, offering a 7.52 per cent annual yield with monthly payments, as long as the index stays above a 30 per cent downside barrier. Even if that barrier is breached, investors don\u2019t lose their full principal but are protected by a tiered buffer below that level.<\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n

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Of course, higher yields are available through more aggressive notes, but this typically involves accepting either more volatile indices or lower downside protection.<\/p>\n<\/div>\n<\/section>\n

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Ultimately, we find these notes provide clients \u2014 and ourselves \u2014 with peace of mind. We\u2019re not forced to predict which market narrative is correct. Instead, we structure portfolios with tools that can flex with the environment, balancing growth and protection while remaining aligned to individual risk tolerance.<\/p>\n<\/div>\n<\/section>\n

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As this market continues to send mixed signals, the key for investors is staying flexible and forward-thinking. Structured notes offer an increasingly valuable tool in achieving that, blending protection with potential, especially in today\u2019s uncertain climate.<\/p>\n<\/div>\n<\/section>\n

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While the path ahead may remain bumpy, having strategies designed to respond dynamically to market conditions helps investors stay invested \u2014 and more importantly, stay confident \u2014 in the journey.<\/p>\n<\/div>\n<\/section>\n

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Martin Pelletier, CFA, is a senior portfolio manager at Wellington-Altus Private Counsel Inc., operating as TriVest Wealth Counsel, a private client and institutional investment firm specializing in discretionary risk-managed portfolios, investment audit\/oversight and advanced tax, estate and wealth planning. The opinions expressed are not necessarily those of Wellington-Altus.<\/em><\/p>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/div>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n<\/div>\n<\/section>\n

View Financial Post article<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Martin Pelletier: These tools can flex with investment conditions, balancing growth and protection What a rollercoaster year it\u2019s been for global markets. Equity indices around the world were shaken earlier this year as escalating\u00a0U.S. tariff tensions\u00a0triggered waves of uncertainty. Sharp declines and heightened volatility left investors scrambling for direction amid fears that a\u00a0prolonged trade war […]<\/p>\n","protected":false},"author":229,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_oasis_is_in_workflow":0,"_oasis_original":0,"_oasis_task_priority":"","_exactmetrics_skip_tracking":false,"_exactmetrics_sitenote_active":false,"_exactmetrics_sitenote_note":"","_exactmetrics_sitenote_category":0,"footnotes":""},"categories":[21],"tags":[],"class_list":["post-1640","post","type-post","status-publish","format-standard","hentry","category-financial-post"],"_links":{"self":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts\/1640","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/users\/229"}],"replies":[{"embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/comments?post=1640"}],"version-history":[{"count":2,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts\/1640\/revisions"}],"predecessor-version":[{"id":1642,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/posts\/1640\/revisions\/1642"}],"wp:attachment":[{"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/media?parent=1640"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/categories?post=1640"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/advisor.wellington-altus.ca\/trivestwealthcounsel\/wp-json\/wp\/v2\/tags?post=1640"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}