CI Investments Inc. launched the Bank of Montreal PARTNRS (Principal At Risk Notes), CI Signature Funds R.O.C. Class, Series 1 on Tuesday, a new investment product issued by Bank of Montreal that provides actively managed exposure to three CI mutual funds at a management fee that is lower than the cost of buying the funds directly.
The notes will be linked to the performance of a notional portfolio consisting of Signature High Income Fund, Signature Dividend Fund and Signature Select Canadian Fund. What differentiates these Notes from other similar products is the ability of the notes’ investment manager — Signature Advisors — to actively allocate assets among the three funds and employ discretionary leverage for up to 33% additional exposure to the portfolio.
In addition, the notes pay monthly distributions in the form of tax-efficient return of capital, with an indicative distribution rate targeted at 6% for the first 12 months. Signature Advisors will determine the indicative distribution rate each year based on prevailing market conditions and its estimate of distributable cash flow from the funds for the upcoming 12-month period.
The amount of principal repayments paid to holders, however, will be determined by the bank based on the notes’ actual performance and may differ from the target rate. Any distributions paid on underlying units of the funds will be notionally reinvested in the note structure, providing tax-deferred growth for investors. The notes have a 10-year term to maturity and are not principal protected.
Bank of Montreal and CI Investments launch new principal-at-risk notes
The notes offer tax-efficient income potential and low-cost exposure to three award-winning funds
- By: IE Staff
- September 11, 2007 September 11, 2007
- 13:43