New income funds from Purpose Investments

The asset management firm has announced the launch of two ‘innovative’ income fund products

Purpose Investments Inc. has launched two new income-generating investment funds: the Purpose Conservative Income Fund and the Purpose Canadian Financial Income Fund. The IPO for ETF shares of the funds has been completed, and they trade on the TSX 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 CEO of Purpose Investments, on the day of the funds’ release. "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.”

The Purpose Conservative Income Fund was created for investors interested in a risk-managed strategy that offers moderate income along with modest capital appreciation, while managing volatility and downside risk. Differentiating the fund from its peers is an equity option collar overlay strategy, which reduces its dependence on bond weighting for low volatility and therefore allows for increased exposure to equities.

On the other hand, the Purpose Canadian Financial Income Fund presents low-cost, diversified exposure to a concentrated portfolio of the largest Canadian banks and life insurance companies. It uses an active covered-call option strategy to give investors enhanced tax-efficient monthly distributions along with long-term growth potential, while mitigating risk. “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,” according to the release from Purpose Investments.

Both funds are structured in Purpose’s innovative corporate class fund family, which helps provide investors with a more tax-efficient total return. Both ETF series and Series F shares of the funds come with a 0.55% management fee, while Series A shares have 1.55%. The Purpose Conservative Income Fund also has Series D shares with a management fee of 0.80%.

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