Not all income is created equal

Not all types of investment income are taxed the same. For example, income you receive in the form of interest is taxed at a higher overall rate than eligible Canadian dividend income or capital gains.

For this reason, efficiently managing different types of income you receive as part of your total income can have a material effect on the amount of income tax that you pay, your after-tax return on your investments and on the wealth you are able to accumulate over time.

Class Funds

Unlike most mutual funds, which are legally structured as a trust, our class funds are structured under a single "Mutual Fund Corporation". Similar to a typical corporation, investors obtain shares in the corporation. These shares are designed to give investors the power to choose their preferred income type.

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Our Tax Classes provide investors with more choice and flexibility in addressing their investment needs, resulting in the potential to maximize their after-tax return.

How Does It Work?

Six step process

tax strategy 11. Select an Investment Strategy
Investors are able to separate their investment decision from their tax decision. Select investments that are a suitable match for fulfilling future goals on both a risk and return basis.
tax strategy 22. Select a Tax Class
Select a Tax Class to complement tax and financial planning objectives such as: tax deferral, income splitting, and tax efficient cash flow generation. Investors can select our Registered Funds to invest in their non-taxable accounts such as: RRSPs, RRIFs and TFSAs.
strategy3 6.183. The Funds Invest and Gather Income
All funds are housed within a single "bucket", the Mutual Fund Corporation. The underlying investments within each fund generate different types of income (interest, capital gains, foreign dividends, and Canadian dividends). The income generated is tallied within the Corporation.
strategy4 6.184. The Allocation
The Mutual Fund Corporation then allocates the gathered income to the Tax Classes. For example, eligible Canadian dividends are generally allocated to the Dividend class.

By maintaining separate accounting records, we ensure each fund's returns are calculated accurately and that investment income is allocated to the optimal/appropriate Tax Class.
strategy5b 6.185. Dealing with High Tax Rate Income
Interest income and foreign dividends attract high tax rates, making them inefficient sources of income for investors. The Mutual Fund Corporation utilizes a combination of available tax refunds and fees/expenses generated by the funds to absorb high rate taxable income.
tax strategy 66. Comprehensive Tax Planning
Investment growth and the facilitation of tax minimization are top priorities within our structure. The two-tier decision (selecting an Investment Strategy and a Tax Class) creates a customizable and flexible investment solution that can facilitate an array of tax and financial planning objectives.

Would you like more information?

The payment of distributions for Dividend class and Return of Capital class should not be confused with a mutual fund's performance, rate of return or yield. If distributions paid by a mutual fund are greater than the performance of the fund, then the investment will decline. Distributions paid as a result of capital gains realized and dividends earned by the mutual fund corporation are taxable in the investor's hands in the year they are paid. For Return of Capital class, the adjusted cost base will be reduced by the amount of any returns of capital. If the adjusted cost base goes below zero, then investors will have to pay capital gains tax on the amount below zero.

Tax liabilities on investment income and capital gains earned by a mutual fund corporation cannot be mitigated nor can they be fully managed in all circumstances. Therefore, the mutual fund corporation may be required to make taxable distributions to investors in a Tax Class for which a distribution is not in accordance with their tax preference.

Distributions paid by the mutual fund corporation may be comprised of dividends, capital gains dividends, or returns of capital. All dividends (other than capital gains dividends) will be classified as "eligible dividends" for tax purposes.

Fiera Investments LP does not provide tax, accounting, regulatory, or legal advice to its clients. All investors are advised to consult with their tax, accounting, or legal advisers regarding any potential investment.