Management Fees and Performance Incentives
Golden Opportunities Fund’s management fees may seem higher than other mutual funds. Why? There are two reasons.
First, Golden Opportunities Fund is a smaller, local regional Fund operating under the same regulations as larger national mutual funds. This rigorous compliance is expensive, but important for investors. The cost of operations on a percentage basis relative to the size of the Fund looks larger than the larger national mutual funds.
Second, Golden Opportunities Fund is an actively managed mutual fund which means that there are people working every day to drive value for shareholders within portfolio companies. This active management, which includes rigorous diligence often taking more than a year to determine if a company is the right fit to invest in, and participating in the ongoing governance and oversight of companies once they are in the portfolio, creates additional value for shareholders, but also increases operational expenses beyond those of traditional mutual funds.
Management fees also include an incentive participation fee to reward the fund manager when they achieve performance above benchmarks set.
For more information on fees, please see the Fund’s Prospectus.
REPORTED PERFORMANCE
The above performance data is provided by Fundata, see Disclaimer for more important information.
Market Diversification & Low Volatility
Let’s compare apples to apples.
If the fund reports a 3.5% return each year over an 8 year period it is equivalent to an alternative investment reporting a return of 9%. This is thanks to the 32.5% tax credit you will receive on your deposit*.
When looking at the difference between a $1,000 investment in Golden Opportunities’ Diversified Class A-B share since inception and a $1,000 investment in the S&P/TSX SmallCap Total Return Index** over the same time period, the Golden Opportunities investment grew to $1,438 ($1,763 including the 32.5% tax credit) vs $1,401.
*Example assumes a $5,000 investment, Fund returns of 3.5% annually for eight years, and 32.5% LSVCC tax credits received upon investment
**The S&P/TSX SmallCap Total Return Index (the ‘Index’) provides an investable index for the Canadian small-cap market. The Index has been selected for illustrative and comparative purposes as the Index was developed to be used as a benchmark for those investment mandates with small-cap exposure in the Canadian equity market, such as the Golden Opportunities Fund. Please note that there are differences between the Index and the Golden Opportunities Fund regarding the number of constituent companies and the mean, largest and smallest total market cap/valuation of the constituent companies.
GOLDEN OPPORTUNITIES MANAGES MONEY,
BUT INVESTS IN PEOPLE
Golden Opportunities invests in homegrown companies and keeps them locally owned right here in our province. There is pride in being from the prairies and keeping these companies and jobs local.