Wednesday October 26th, 2016 - Purpose Investments Inc. (“Purpose”) has launched two new income-generating investment funds, the Purpose Conservative Income Fund (TSX:PRP) and the Purpose Canadian Financial Income Fund (TSX:BNC) (collectively the “Funds”). Purpose has completed the initial public offering of ETF shares of the Funds. The ETF shares of the Purpose Conservative Income Fund and the Purpose Canadian Financial Income Fund will commence trading on the Toronto Stock Exchange today under the ticker symbols PRP and BNC respectively.
“Today’s launch of these two new Funds represents an important expansion of Purpose’s income solutions suite,” said Som Seif, President and Chief Executive Officer of Purpose Investments. “The Purpose Conservative Income Fund and the Purpose Canadian Financial Income Fund provide investors with important and innovative ways to help satisfy the need for regular monthly income while managing risk through option strategies.”
Purpose Conservative Income Fund
One of the biggest challenges facing investors and advisors today is how to allocate assets to fixed income in their portfolios: the reward relative to the risk of a ‘buy and hold’ bond-heavy conservative balanced portfolio is not as attractive as it once was. The Purpose Conservative Income Fund has been created for investors looking for a risk-managed strategy that provides a moderate level of income with modest capital appreciation while managing volatility and downside risk.
What differentiates the Purpose Conservative Income Fund from its peers is its utilization of an equity option collar overlay strategy. This strategy reduces the Fund’s dependence on a heavy bond weighting to achieve a low-volatility profile, and allows for higher exposure to equities – and therefore potentially enhanced overall returns.
Purpose Canadian Financial Income Fund
Should rates start to rise, it will likely have a positive impact on the financial sector, as net interest margins and profitability generally increase along with interest rates. The Purpose Canadian Financial Income Fund is a low-cost, diversified way to gain exposure to a concentrated portfolio of the largest Canadian banks and life insurance companies.
The Fund uses an active covered-call option strategy to provide investors with enhanced tax-efficient monthly distributions and the potential for long-term growth, while mitigating risk.
Both the Funds are structured in Purpose’s innovative corporate class fund family, which helps provide a more tax-efficient total return to investors. Like all Purpose funds, these Funds will provide daily transparency, liquidity, and low management fees of 0.55% on the ETF Series and Series F shares and 1.55% on the Series A shares. The Purpose Conservative Income Fund is also available in Series D shares at a management fee of 0.80%.
Source: Purpose Investments