– Purpose Investments is a well-run company, founded by Sam Seif who is
considered to be one of the top innovators in the wealth management
business. The company offers a wide range of mutual fund and ETF products,
and some, as you might expect, are performing better than others.
You refer to dividends, so perhaps one of the funds you own is
Purpose Core Dividend Fund. It does indeed pay a nice monthly dividend of $0.0819 per unit (about
$0.98 per year at the current rate for a 4.1% yield). However, the total
return is well below average for its category over all time frames. The
3-year average annual compounded rate of return to the end of October was
2.7% (A units) compared with 3.8% for the category. Year to date it is down
8.5% to Oct. 31. If this is one of the funds you own, my advice is to look
for something else.
A better bet if you’re interested in income might be the
Purpose Multi-Asset Income Fund. It invests in seven other Purpose funds plus some of the major banks. It
hasn’t been around for long, but it’s down only 1.2% in the 12 months to
Oct. 31 (A units) compared to a loss of 2.2% for its Global Neutral
Balanced peer group. The monthly distribution is $0.042 per unit (about
$0.50 a year), to yield 5.3%. There is also an ETF version of this fund
trading on the TSX under the symbol PINC, which has a lower management fee
(0.85% MER compared with 1.55% for the A series mutual fund). The ETF
trades at a higher price, but the distributions are double those of the
mutual fund units.
Overall, I found many of the Purpose funds I looked at were recently
performing below the category averages. There are many reasons for this,
including the recent downdraft in both bonds and equities, which has
affected performance for most funds. But don’t feel that you are committed
to this organization. Do some research. Ask your advisor for alternative
suggestions from other companies and check out the total returns, cash
flow, and costs of those your advisor recommends.
is one of Canada’s best-known personal finance commentators and
investment experts. He is the publisher of
The Internet Wealth Builder and The Income Investor
newsletters, which are available through the Building Wealth website.
For more information on subscriptions to Gordon Pape’s newsletters,
check the Building Wealth website.
Follow Gordon Pape on Twitter at
and on Facebook at
Notes and Disclaimer
© 2018 by The Fund Library. All rights reserved.
The foregoing is for general information purposes only and is the opinion
of the writer. Securities mentioned carry risk of loss, and no guarantee of
performance is made or implied. This information is not intended to provide
specific personalized advice including, without limitation, investment,
financial, legal, accounting, or tax advice. Always seek advice from your
own financial advisor before making investment decisions.
BUILDING WEALTH WITH GORDON PAPE