# RBC MarketSmart GIC



## indexxx (Oct 31, 2011)

Has anyone here looked at the RBC MarketSmart GIC?

It looks like they are trying to combine an Index fund and a GIC- they are offering a guarantee of principle plus a guaranteed return, and it's based on equity indexing. If one locks in for 5 years the guaranteed return is 5.25% with a capped maximum return of 25%.


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## wendi1 (Oct 2, 2013)

Typically, these GICs return LESS than the plain 5 year GIC.

There are several threads on this forum trashing these sorts of products, if you really want to wade through them.


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## gibor365 (Apr 1, 2011)

I bought similar guaranteed GIC in TD on MAr 2010 for 5 years, don't remember exact maximun return , it's 20 or 25%. and consist of 50% TSX bank index and 50% capped utility index, currently I'm up 17%


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## Beaver101 (Nov 14, 2011)

^^ I agree with wendi. Using simple math and a non-compounding assumption, the "maximum" (provided the market goes all bulls for 5 years), the maximum you would get is 5% per year on this investment. If the market goes bear, well your money is tied up for 5 years but you're guaranteed a minimum of 1.05% per year.


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## fatcat (Nov 11, 2009)

do your own
buy enough gic to equal 100% of your investment in 5 years and then spend the balance on XIU
like you buy (i'm just inventing numbers here: you spend 9500 on a gic that will pay off 10K and you spend the extra 500 on XIU)
you will be guaranteed 100% of your return on your gic investment plus whatever XIU gains over the time period


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## Potato (Apr 3, 2009)

This is such deceptive advertising on RBC's part. Most GICs and savings products are advertised on an annualized interest rate for comparison's sake (you wouldn't normally see them advertising "1-year GIC, 1%, 5-year GIC 5%!"), but as if these market-linked products weren't skeevy enough, all their advertising is on a "total return over period" basis.


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## Beaver101 (Nov 14, 2011)

Potato said:


> *This is such deceptive advertising on RBC's part*. Most GICs and savings products are advertised on an annualized interest rate for comparison's sake (you wouldn't normally see them advertising "1-year GIC, 1%, 5-year GIC 5%!"), but *as if these market-linked products weren't skeevy enough*, all their advertising is on a "total return over period" basis.


 ... lol, no kidding. 

Actually, this product from RBC is abit clearer (?)/simpler than the one with BMO that requires a participation factor gizzmo, etc. with enough fine print reading to make one's head dizzy ... this sucker investor bought a 3 years term and ended up with my principal back only (bad luck with the markets then) and never again - what a waste of time. Maybe gibor may have better luck with his 5 years term market-related GIC with TD.

Side note: Maybe the product should be renamed as *Marketing*_Smart_ GIC.


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## Retired Peasant (Apr 22, 2013)

gibor said:


> I bought similar guaranteed GIC in TD on MAr 2010 for 5 years, don't remember exact maximun return , it's 20 or 25%. and consist of 50% TSX bank index and 50% capped utility index, currently I'm up 17%


I think you should read the details more carefully. The return is calculated based on the index value 2 business days after you bought it, and 1 business day before it matures - solely on those two values - doesn't matter what the indices do in between. So you really won't know what or if you'll be up at all until it matures.


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## fatcat (Nov 11, 2009)

Potato said:


> This is such deceptive advertising on RBC's part.


how shocking, i'm really quite stunned to see one of our largest and most respected business institutions engage in such a practice .... goodness, this _is_ very disturbing ... i think i need to lie down and catch my breath


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## gibor365 (Apr 1, 2011)

Retired Peasant said:


> I think you should read the details more carefully. The return is calculated based on the index value 2 business days after you bought it, and 1 business day before it matures - solely on those two values - doesn't matter what the indices do in between. So you really won't know what or if you'll be up at all until it matures.


I know it  I meant so far my return is 17%, if both indexes will be flat until Mar 3, 2015, my return will be 17% (about 3.4% annually), the minimum I'll get 1.26% annually, still better than ATL5000 or TDB8150...
in any case I can guarantee that won't buy it again


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## humble_pie (Jun 7, 2009)

Beaver101 said:


> Actually, this product from RBC is abit clearer (?)/simpler than the one with BMO that requires a participation factor gizzmo, etc. with enough fine print reading to make one's head dizzy ... this sucker investor bought a 3 years term and ended up with my principal back only (bad luck with the markets then) and never again - what a waste of time



here's what's afoot the way i see it. If u know your principal from your principles u are already a head


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## gibor365 (Apr 1, 2011)

The most rediculous product imho is protected notes


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