What is the Purpose Corporate Class?
Purpose Corporate Class is a mutual fund corporation designed to minimize the impact of taxes for investors. Mutual funds and ETFs can be structured two ways – as investment trusts or corporations. From an investment perspective, both are managed the same way, hold identical portfolios and produce similar returns. The main difference is that an investment trust generally consists of just one fund, whereas a corporation is one tax entity that can contain multiple funds.
How Purpose Corporate Class works
The corporate class structure is set up like a company. Just like a company might have several business segments, a corporation can hold multiple funds as part of a single corporate tax entity. This allows it to spread profits and losses across the underlying funds, which can lead to better tax outcomes.
In addition, funds within the corporate class structure aim to provide investors with the most tax-efficient forms of income. Instead of paying out interest that’s taxed the same as regular income such as your salary or foreign dividends, you receive distributions in the form of capital gains or Canadian dividends – which are typically taxed at more favourable rates – or return of capital. With a corporate class fund, you can invest in traditional income strategies and take advantage of the lower tax rates.
Innovation for the ETF industry
Purpose’s corporate class structure for ETFs was the first of its kind in Canada and has changed how people use ETFs in their portfolios. Before the launch of the Purpose Corporate Class Funds, investors were only able to access the benefits of a corporate class structure through higher-cost mutual funds. Now, you can access a broad range of unique investment solutions in the corporate class structure using the vehicle most convenient for you, be it ETF or mutual fund, all at the same low management fee. Purpose Corporate Class Funds provide you with a suite of affordable investment products designed to help you reach your financial goals.
Commissions, trailing commissions, management fees and expenses all may be associated with investment funds. Please read the prospectus before investing. If the securities are purchased or sold on a stock exchange, you may pay more or receive less than the current net asset value. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.