T-Class provides investors with a monthly distribution consisting of ROC. The result is a higher after-tax cash flow without compromising the earnings potential of the investment. Taxes are deferred until the ACB drops below zero, a time when the investor may be in a lower tax bracket.

When the ACB reaches zero, distributions will start to be treated as capital gains, which are still taxed at a significantly lower rate than interest income.

Calculation of Monthly Payments

The NAV of the fund on the last business day of the year determines the distribution per unit for the following year, as shown in the table below. The distribution is reset annually to maintain a consistent target payout. This also ensures preservation of capital to prevent an erosion of the ACB.

When the fund's returns exceed the payout, the investor's portfolio will continue to grow.

Shares = 15,0001st Year2nd Year
Up market
3rd Year
Down market
NAVPS on December 31 of previous year$10.00$10.70$9.00
5% Distribution rate5% X $10.005% X $10.705% X $9.00
Annual Distribution$0.50$0.535$0.450
Monthly Distribution$0.042$0.045$0.038
Monthly cash flow$630$669$563

Investors can customize their ROC distributions by selecting a custom rate or fixed dollar amount between 0.25% and 8% (increments of 0.25%) of the value of the fund as of the previous year end. Any ROC in excess of the requested amount is reinvested into the fund.

  1st Year2nd Year
Up market
3rd Year
Down market
Shares 15,000 15,266 15,602
NAVPS on December 31 of previous year$10.00$10.70$9.00
5% Distribution rate5% X $10.005% X $10.705% X $9.00
Annual Distribution$0.50$0.535$0.450
Monthly Distribution$0.042$0.045$0.038
4% Custom Rate Monthly Distribution$0.033$0.036$0.030
Reinvest Remainder$0.008$0.009$0.008
Monthly cash flow $495 $550 $468
  1st Year2nd Year
Up market
3rd Year
Down market
Shares 15,000 15,266 15,602
NAVPS on December 31 of previous year$10.00$10.70$9.00
5% Distribution rate5% X $10.005% X $10.705% X $9.00
Annual Distribution$0.50$0.535$0.450
Monthly Distribution$0.042$0.045$0.038
Total monthly distrbution $630 $681 $585
Custom $400 fixed Monthly Distribution $400 $400 $400
Reinvest Remainder $230 $281 $185
Monthly cash flow $400 $400 $400

 

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