What are the Fund’s objectives?
Canoe EIT Income Fund aims to provide investors with monthly cash distributions and to maximize net asset value for the benefit of its Unitholders. The portfolio is an actively managed. diversified portfolio of income-generating and capital-growth oriented securities.
Who is the Portfolio Manager for this fund?
Effective July 29, 2013, Robert Taylor, CA, CFA, Senior Vice President and Portfolio Manager with Canoe Financial, assumed portfolio management responsibilities for EIT.UN.
What is the difference between a closed-end fund and open-end fund?
A closed-end fund has a set number of shares that trade on a stock exchange (for example, the Toronto Stock Exchange). These shares are sold through an initial public offering, and any subsequent share purchases are done in the secondary market through an investment advisor/firm. The purchase or sale price of a closed-end fund share is the market price, which can be above the Net Asset Value (NAV) (called a premium) or below the NAV (called a discount), depending on the perceived value of the fund’s shares.
An open-end fund continuously offers and redeems shares based on the inflow or outflow of investors. Shares of an open-end fund do not trade on any exchange. The purchase or sale price of an open-end fund share is NAV plus or minus any fees that may be applicable.
How do I purchase units of EIT and what kinds of costs are associated?
Canoe EIT Income Fund trades on the Toronto Stock Exchange as a common stock under the symbol EIT.UN, and has a market price. To purchase units of EIT, you require an account with an investment advisory firm. Commissions are paid to your investment advisor and/or brokerage firm when you purchase or sell any units.
What is the Management Expense Ratio?
The Management Expense Ratio (MER) consists of management fees, the general and administrative expenses relating to the operation of EIT.UN, and interest on the credit facility.
MER (December 31, 2016):
1.50% excluding issue costs and interest
1.64% including issue costs and interest
What is the termination date for the Canoe EIT Income Fund?
EIT has a dissolution date of December 31, 2050, subject to any extension approved by the Unitholders or earlier termination as described in the Annual Information Form.
Is the Fund able to use leverage? If so, how much?
Pursuant to the Declaration of Trust, EIT.UN is able to borrow up to 20% of the value of the total assets of the fund after giving effect to the borrowing.
How does the Fund determine and support the distribution?
Since inception, the Fund has determined the distribution amount and assessed its sustainability based on the return generated from a variety of investment sources, including portfolio dividends, interest, capital gains (both realized and unrealized) and return of capital. The current portfolio manager has employed a total return investment strategy that generally seeks to generate return from dividend growth securities.
Record, payment and ex-distribution dates for each distribution will be provided via news release on a monthly basis.
What is the redemption feature and how does it work?
The Canoe EIT Income Fund has a voluntary annual capped redemption feature whereby unitholders may redeem up to 10% of the aggregate outstanding units of the fund at 95% of the average net asset value, based on the three trading days prior to the redemption date, less direct costs.
For further information regarding EIT.UN’s redemption Privilege, please go to the Annual Information Form.
What is the ex-Distribution Date?
The ex-distribution date refers to the day on or after which new units purchased will not receive that month’s distribution. The ex-distribution date is two days prior to the record date. This is in line with trade settlement rules, which require trade plus three days to become an actual unitholder. Investors are encouraged to consult with their investment advisor for a full understanding of trade settlements.
Do you provide an estimate on my tax breakdown, including return of capital?
As we need to wait until all of the relevant tax data is received from the portfolio companies and a tax analysis is performed, Canoe is unable to provide an estimate prior to releasing the full information. Canoe will post on the website in early March containing the full tax breakdown of distributions for that year. View historical tax information.
What is my adjusted cost base for tax purposes?
Canoe is not able to calculate this information for investors. Please consult with your investment advisor or go to ACB Tracking, a fee based service provider that can help.
I am a non-resident of Canada – how much withholding tax will be deducted?
Canadian domestic law requires 25% tax to be withheld on payments made to non-residents. In certain circumstances this 25% withholding rate may be reduced by Canada’s bilateral tax treaties for certain kinds of payments to residents of those countries with a bilateral tax treaty. Investment advisors are responsible for assessing the withholding tax requirements on distributions from the funds based upon the residency of the recipient.
What is the Premium Distribution Reinvestment Plan
Unitholders of the Canoe EIT Income Fund may elect to have their monthly cash distributions automatically reinvested into new units of the Fund at 95% of the market price, or receive 102% of the monthly cash distribution via the Premium DRIP™ component of the plan. Participants do not pay any costs associated with these features. The Premium DRIP™ and DRIP allow unitholders to dollar cost average their investment in the Fund which should improve their total return.
Highlights of the Plans
- No brokerage fees or commissions;
- Monthly purchases allow for dollar cost averaging of your investment;
- Ease and benefits of automatic reinvestment compounding;
- Unitholders will receive statements for their account each quarter.
Registered unitholders, those who hold a physical unit certificate in their name, should contact Alliance Trust Company at 403-237-6111 to participate. Any non-registered unitholder wishing to participate in the Premium DRIP™ or DRIP should contact their investment advisor.
Note: Effective September 16, 2014, the Optional Cash Purchase (OCP) component of the plan is no longer available.
When will I see new units in my account from the DRIP distribution?
If you hold your units in your brokerage account, please consult with your investment advisor for full details on when your account should reflect these new units. It is expected, however, that DRIP units should be credited to your account usually about the 15th day of the month.