Purpose Corporate Class Funds

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The true benefit of the corporate class structure lies within its capability to consolidate the expenses, income, gains and losses of multiple funds into a single entity. This helps to create tax-efficient distribution yields that are far superior to traditional income from a tax rate perspective.

As a firm, we place a great amount of consideration on maximizing investor experience, reducing taxes and maximizing the distributions flowed to investors when developing each of our investment funds.

As we manage and create new products, we will continue to focus on maximizing tax-efficiency to optimize client outcomes, and such thinking will continue to include the corporate class structure. We believe in the model, and it will remain core to our business.

What is Purpose Corporate Class?

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How Purpose Corporate Class Works

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Purpose Corporate Class is, as the name suggests, a mutual fund corporation. Mutual funds can be structured two ways – either as a trust or a corporation. From an investment perspective, both can be managed in the same way, hold identical portfolios and produce similar returns. The main difference is that a mutual fund trust is generally only one fund, whereas a corporation is one entity that may consist of any number of share classes, each representing a separate fund.

Purpose Corporate Class funds are set up as a mutual fund corporation with multiple fund strategies. Each strategy, often referred to as a “corporate class fund,” would represent a different investment fund. However, the different funds are part of a single corporate tax entity.

One of the main benefits of a corporate class fund is that distributions to shareholders of the mutual fund corporation are classified as Canadian dividends or capital gains – both of which receive preferential tax treatment. In comparison, a trust may also pay out other forms of income – such as foreign dividends or interest income – which attract the highest level of tax. This means that you can invest in traditional income funds and be assured that you will not receive a distribution of highly taxed interest income.

In addition, if a mutual fund realizes a capital loss in a year, it cannot be claimed by investors for tax purposes. However, the fund can use these losses to offset capital gains. The Corporate Class umbrella goes one step further, allowing these losses and gains to be spread over a wide base of many funds, instead of being confined to only one fund, as it is with a trust.

Do you enjoy paying tax?

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Innovation for the ETF Industry

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If you are investing outside of a registered plan, distributions could result in a tax bill.

You can reduce the impact of taxes on your investments with Purpose Corporate Class Funds. Funds under our Corporate Class structure can share losses, expenses, and loss-carry-forward amounts to reduce or defer the taxable distributions to investors. When distributions are paid, they are distributed as capital gains and/or dividend income – currently the most tax-advantaged forms of income.

Tax-Efficient and Low-Fee Investing

Purpose’s Corporate Class structure for ETFs is 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, they can access unique investment solutions in the corporate class structure using the most convenient vehicle for them, be it ETF or mutual fund.

Purpose Corporate Class Funds provide investors with a suite of exceptional low-fee investment products to meet a range of financial needs in all market conditions. Purpose’s high-quality funds allow investors to construct a portfolio that meets their investment objectives, risk profile, and time horizons.

Suitability

Purpose Corporate Class funds are suitable for a variety of different investors, including:

investing-in-out-plansThose investing inside and outside of a registered plan. childrenParents and grandparents who set up trust accounts for minor children.
cash-flowIncome investors looking for a tax-efficient source of cash flow. Old-age-securitySeniors who are collecting Old Age Security benefits.
charityThose who plan to make charitable donations with their investments. corporationIncorporated business owners.

Purpose Corporate Class Funds

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