Franklin Templeton Investments Corp. has launched Series T, a new series of mutual funds designed to help investors increase their monthly cash flow through a tax-efficient withdrawal plan. The funds offer a monthly distribution based on return of capital to provide investors a regular cash flow from their investments on a tax-deferred basis for greater financial flexibility.

“Investors are looking for a way to increase their monthly cash stream, especially in this low interest rate environment,” says Don Reed, president and CEO of Franklin Templeton Investments Corp. “Our new Series T funds should provide investors with the increased monthly cash flow they desire while still offering good long-term growth potential through the funds.”

The fund company is the first in Canada to offer equity-only funds — Templeton International Stock and Bissett Multinational Growth — as part of its tax efficient withdrawal plan. “We have included equity-only funds along with balanced and dividend funds to provide investors a greater range of diversity and long-term growth potential through a wide variety of investments,” Reed adds.

The Series T family includes three Growth at a reasonable Price, or GARP, style funds: Bissett Dividend Income Fund; Bissett Canadian Balanced Fund (formerly Bissett Retirement Fund); Bissett Multinational Growth Fund; and two value funds: Templeton Canadian Asset Allocation Fund and Templeton International Stock Fund.

The funds work by offering a monthly distribution that is based on return of capital which, for tax purposes, is considered to be a return of the original investment as opposed to interest or dividend income. This means that instead of being taxed on the withdrawal as a capital gain, the adjusted cost base of your original investment is reduced, and any taxes are deferred until the investment is redeemed (or the adjusted cost base reaches zero). Currently, the target rate for the return of capital distribution is 8% per unit, per year of the net asset value of the fund.

“This is the ideal investment for any investors who, outside of their RSP plans, are looking to supplement their monthly cash flow without triggering an immediate tax event and still stay invested for continued growth over time,” Reed concludes.