Purpose Investments has launched the Purpose Premium Yield Fund (PYF). The initial public offering of the Fund's ETF shares has closed and the ETF shares are now trading on the Toronto Stock Exchange.
The Purpose Premium Yield Fund employs a flexible approach to investing, using cash-covered put and covered call option strategies blended with fundamentally-selected equity securities to generate income while mitigating risk. The goal of the Fund is to provide a long-term return similar to the equity markets, but with substantially lower risk than the equity markets. In addition, the Fund aims to pay its returns as a steady stream of tax-efficient high distributions while also generating attractive net asset value growth.
"Investors continue to search for yield in today's low interest rate environment. And in this search for higher yields, we find investors are reaching deeper and deeper into lower grade fixed income products which comes with significant credit and interest rate risks," says Som Seif, President and Chief Executive Officer of Purpose Investments. "We've designed the Purpose Premium Yield Fund to provide investors with a great way to achieve higher levels of income, but without taking on credit or interest rate risk. The Fund will provide an alternative source of income for portfolios, and will allow investors to generate their desired income while reducing their ownership of bonds and equities."
The Purpose Premium Yield Fund is optimised for clients to achieve a great experience. The Fund will target tax-efficient monthly distributions equaling 7% per annum, which are expected to be characterised as capital gains and dividends. The Fund is structured in Purpose's innovative corporate class, which allows investors to move amongst other funds within Purpose Fund Corp. on a tax-efficient basis. Like all Purpose funds, the Fund will provide daily transparency and liquidity. Finally, PYF will have a very low management fee of 0.60% on the ETF Series and Series F shares and 1.60 per cent on the Series A shares.