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Mutual funds

ONE Financial issues shares to All-Weather investors

ONE Financial has issued shares to all investors who have subscribed to-date for its All-Weather Profit Global Diversified Fund, the first mutual fund launched from its new All-Weather Profit Family line-up.

The new family is Canada's first and only family of long/short mutual funds and wrap portfolios.

The company expects to launch the other nine mutual funds, six wrap portfolios, and two protected portfolios it has developed under the All-Weather Profit Family moniker in the coming months.

The All-Weather Profit Family is very different from traditional mutual funds, which can generally only profit in two ways - from stocks or bonds going up. The All-Weather Profit Family is a special class of mutual funds called "commodity pools". This classification enables them to diversify into four asset classes, and pursue profit in eight ways – from stocks, bonds, commodities, and currencies, going up (called "long" investing) or down (called "short" investing).

"Spreading positions over four asset classes across 50-60 global markets, and investing both long and short, gives us far more opportunities to profit than traditional mutual funds. Markets trend both higher and lower, and we have the ability to profit from both scenarios," says ONE Financial's lead portfolio manager Stuart Campbell.

Previously, long/short investments were generally only available through hedge funds offered to large-scale investors such as institutions, pension funds, and high net worth investors. Hedge funds traditionally have high investment minimums, starting in the six figures or more. Through the All-Weather Profit Family, however, all Canadians can access these high-end investment strategies, with investment minimums starting at CAD500. Investors in the Family also receive all the important benefits of traditional mutual funds. These include daily liquidity, transparency, and regulatory disclosure and audit requirements. The All-Weather Profit Family is audited by PricewaterhouseCoopers, and is eligible for RRSPs, RRIFs, RESPs, TFSAs and other registered investments.

"Stock markets have been extremely volatile over the last ten years. And low interest rates on safer investments don't even provide enough return to keep pace with the rising cost of living. This has made it very difficult for both income and growth investors to meet their goals. We created the All-Weather Profit Family to provide our investors high return potential similar to the stock markets, but without the same level of downside risk," says ONE Financial's chairman Jeffrey O'Brien.

The All-Weather Profit Family is also designed to provide a number of tax benefits, including the ability to switch amongst any of the funds or portfolios in its family tax-free. This feature leaves more of investors' money in the family to compound for additional growth, even if invested through a non-registered account. When gains are taxed on withdrawal from the family, they are taxed as capital gains - half of the tax rate charged for ordinary income.

The family also offers a variety of monthly tax-efficient income options, as high as nine per cent annually. According to O'Brien, there is generally no tax payable when monthly income is received.

"Often with income-producing products, payments you receive are taxed at the highest tax rate. With the All-Weather Profit Family however, monthly income distributions are expected to be in the form of return-of-capital, which lowers your adjusted cost base. As such taxes would generally not be payable when monthly income is received, but payable if the funds are sold later at a profit or if your adjusted cost base is at zero," says O'Brien.

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