Going the distance: Canada's long-dated notes

Following the success of Manulife's IncomePlus, an insurance product developed for Canada's ageing population, some issuers are marketing long-dated principal-protected notes as retirement products. But as one issuer withdraws its offering, doubts are surfacing about the design and marketability of these notes

When Canadian insurer Manulife launched a retirement product called IncomePlus in October last year, it proved an instant hit among the country's ageing population. Sales reached C$1 billion (US$900 million) in March this year, exceeding all expectations (see box page 34). The 20-year product has been marketed as a new retirement solution, offering guaranteed monthly payments regardless of when an investor retires in the market cycle. In fact, IncomePlus is one of the latest innovations in