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Investment Objective
The objective of the Desjardins Capital Yield Bond Fund is to provide a return similar to that of a Canadian fixed-income fund, less transaction and hedging costs. To do so, the Fund will invest primarily in a portfolio of Canadian equity securities and will hedge its equity risks by entering into derivatives that provide the Fund with a return based on the performance of the Canadian fixed-income fund.
Investment Strategies
To achieve the Fund’s objective, the portfolio manager :
 | Invests in a basket of Canadian securities and entering into forward contracts or other permitted derivatives to hedge the equity risks associated with those securities and to provide the Fund with a return similar to an investment in the Desjardins Canadian Bond Fund or Desjardins Enhanced Bond Fund, less transaction and hedging costs.
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| Expects the earnings from the forward contracts will be treated as capital gains.
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| May invest directly in fixed-income securities or other debt instruments.
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| May hold cash or invest in short-term securities for the purpose of preserving capital and/or maintaining liquidity, based upon the ongoing evaluation of current and anticipated economic and market conditions by the portfolio advisor.
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| May reduce its exposure to equity securities or forward contracts or other permitted derivatives if he feels it is advantageous to unitholders.
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| May use derivatives for hedging or non hedging purposes.
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| May invest up to 30% of the cost of all the Fund’s property in foreign securities.
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| May engage in securities lending transactions as permitted by the Canadian securities regulatory authorities from time to time. |
What Are the Risks of Investing in This Fund?
Although the risk level of the Desjardins Capital Yield Bond Fund remains low, the risks related to stock market, specific issuer, interest rate, credit, liquidity, foreign security, currency, asset-backed securities, mortgage-backed securities, security lending and derivatives should be taken into account.
Who Should Invest in This Fund?
The Desjardins Capital Yield Bond Fund is ideal for investors who require a steady stream of income, have a low-risk tolerance and are seeking security of capital as important investment objectives. It may also be suitable for fixed-income investors looking for an alternative to regular taxable fixed-income funds held in non-registered accounts.
Portfolio Manager
Desjardins Global Asset Management Inc.
Fund Information
Type of fund
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Specialty Fund
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Inception
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January 25, 2008*
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Type of securities
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Mutual Fund Units
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Eligibility
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Not eligible for RRSPs, LIRAs, RRIFs, LIFs, DPSPs, Desjardins SPPs and RESPs
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Management expense ratio
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1.74%
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Income distribution frequency
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Monthly
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Capital gains distribution frequency
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Annually
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*The Fund commenced distribution on March 20, 2008.
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