Russell Investments Canada Ltd. is aiming to provide investors shelter from stormy markets by launching a new tax-efficient Corporate Class structure.

“Russell’s Corporate Class structure is designed to increase your income, not your tax bill. If you have investments outside your RRSP, this structure offers an opportunity for superior growth and income potential, plus tax and retirement planning,” says Irshaad Ahmad, president and managing director of Russell Investments Canada.

Under a Corporate Class structure, each fund is a class of shares in a corporate entity. This structure allows multiple funds to be administered within a single tax-efficient solution.

“With the markets experiencing such turbulence of late, investors need innovative solutions to protect their returns — every dollar counts. It is an ideal time to learn more about corporate class,” Ahmad says.

As part of the corporate class structure, Russell Managed Yield Class reduces taxes on interest income by generating tax-efficient capital gains rather than interest income, by engaging in forward contracts with one or more Canadian banks.

“Corporate class can be used to accelerate the growth of your assets as you accumulate wealth. The structure can also be used to provide steady, tax-efficient retirement income. In addition, with Return of Capital distributions in retirement, it’s possible to maintain Old Age Security eligibility and avoid claw backs,” says Ahmad.

“Another advantage of corporate class is that the structure provides investors with tax-efficient solutions during down markets. For instance, if an investor switches from the trust fund to corporate class fund, they can offset losses from the sale against future gains. This feature can be especially beneficial in today’s tumultuous market environment,” Ahmad concludes.

Russell says its Corporate Class structure is distinct from those of most other fund companies in that its assets are managed by Russell and sub-advised by third-party money managers, whereas most corporate class offerings are only managed in-house.

IE