Ninepoint Convertible Securities Fund

Convertible securities are corporate hybrid securities with the option to be converted into common stock, typically at the discretion of the security holder. This includes commonly known securities such as convertible bonds and preferreds.

Why Invest in Ninepoint Convertible Securities Fund

  • Experience. Sub-Advisor Columbia Threadneedle Investments, with assets under management of $547 billion, has a long track record of managing the strategy.

  • Active management. Convertible securities can serve as an attractive complement to traditional equity income allocations, with potential to diversify income in growth equity sectors such as Technology and Biotechnology.

  • Balance. Identifies and invests in securities with various equity sensitivity profiles (credit sensitive, balanced, equity sensitive).

  • Risk-Adjustment. Thoughtful risk monitoring on sectors, securities and convertible metrics to optimize returns.

  • Access. A high percentage of the convertible market is issued under Rule 144A which prevents direct ownership by individuals. This is not a "do it yourself" asset class.

  • Liquid Structure. Provides daily liquidity for a strategy not typically available to retail investors.

 

Fund Objective

The investment objective of Ninepoint Convertible Securities Fund is to seek to provide unitholders with income and long-term capital appreciation by investing primarily in a portfolio of convertible securities.

Investment Strategies

To achieve the Fund’s investment objective, the Portfolio Manager will look for opportunities for the Fund to participate in the potential growth of the common stocks underlying convertible securities, while seeking to earn income that is generally higher than the income those common stocks would provide.

The Fund expects to invest at least 80% of its net assets under normal conditions in convertible securities. The Fund invests primarily in U.S. securities, however the Fund may invest up to 15% of its total assets in Eurodollar convertible securities and up to an additional 20% of its total assets in other foreign securities. The Fund also may invest directly in equity securities.

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What are Convertible Securities?​

Convertible securities are corporate fixed-income securities that yield lower interest payments with the option to be converted into a pre-determined number of equity securities, typically at the discretion of the bondholder. ​

Fixed Income Features​

Convertible securities allow holders to hedge against company downside via interest and principal payments.​

Capital Structure Planning

The conversion ratio indicates a pre-determined number of shares an investor can receive.​

Dilution Delay​

Capital raises through convertible securities allow issuers to potentially avoid or delay dilution to existing equity holders.

Equity upside capture

After conversion, investors are eligible to receive an equity stake in the underlying company.​

Why Convertible Securities?​

Convertible securities are structured to provide retail investors with an opportunity to enhance traditional portfolios. Given convertible securities are an opaque asset class, experienced Fund Managers are required to identify optimal solutions. Few Global Fund Managers exhibit the track record to consistently deliver results.​

Opportunistic Return Capture​

  • Convertibles have outperformed the broader equity market over the past 20 years while leveraging fixed income characteristics to minimize volatility.

Accessibility​

  • A high percentage of issuances are executed under Rule144A and thus are not exchange listed. New investors require experienced Fund Managers to provide access while providing unique insights.​

Positive Asset Class Tailwinds

  • Depressed treasury yields and equity market volatility is expected to continue; providing exceptional demand for issuances in the convertible market.

 

 

Are You An Accredited Investor?

The minimum subscription amount is $150,000.00 in all jurisdictions, unless you meet the definition of "accredited investor" under National Instrument 45-106 Prospectus and Registration Exemptions.

If you meet the definition "accredited investor" (see below), you may invest a minimum of $25,000. Please consult the Offering Memorandum to determine your qualification status. Investment Advisors should consult their company's internal policies.

The Subscriber, or one or more beneficial purchasers for whom the Subscriber is acting, is (i) a resident of, or the purchase and sale of securities to the Subscriber is otherwise subject to the securities legislation of one of the following: British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, Québec, Newfoundland and Labrador, Nova Scotia, New Brunswick, Prince Edward Island, North West Territories, or Nunavut, and the Subscriber is (and will at the time of acceptance of the Subscription be) an accredited investor within the meaning of National Instrument 45-106 Prospectus and Registration Exemptions ("NI 45-106") because the Subscriber is one of the following:

(a) a Canadian financial institution, or a Schedule III bank;
(b) the Business Development Bank of Canada incorporated under the Business Development Bank of Canada Act (Canada);
(c) a subsidiary of any person referred to in paragraphs (a) or (b), if the person owns all of the voting securities of the subsidiary, except the voting securities required by law to be owned by directors of that subsidiary;
(d) a person registered under the securities legislation of a jurisdiction of Canada as an adviser or dealer, other than a person registered solely as a limited market dealer under one or both of the Securities Act (Ontario) or the Securities Act (Newfoundland and Labrador);
(e) an individual registered or formerly registered under the securities legislation of a jurisdiction of Canada as a representative of a person referred to in paragraph (d);
(f) the Government of Canada or a jurisdiction of Canada, or any crown corporation, agency or wholly owned entity of the Government of Canada or a jurisdiction of Canada;
(g) a municipality, public board or commission in Canada and a metropolitan community, school board, the Comité de gestion de la taxe scolaire de l'île de Montréal or an intermunicipal management board in Québec;
(h) any national, federal, state, provincial, territorial or municipal government of or in any foreign jurisdiction, or any agency of that government;
(i) a pension fund that is regulated by the Office of the Superintendent of Financial Institutions (Canada), a pension commission or similar regulatory authority of a jurisdiction of Canada;
(j) an individual who, either alone or with a spouse, beneficially owns financial assets having an aggregate realizable value that before taxes, but net of any related liabilities, exceeds $1,000,000;
(k) an individual whose net income before taxes exceeded $200,000 in each of the 2 most recent calendar years or whose net income before taxes combined with that of a spouse exceeded $300,000 in each of the 2 most recent calendar years and who, in either case, reasonably expects to exceed that net income level in the current calendar year;
(Note: If individual accredited investors wish to purchase through wholly-owned holding companies or similar entities, such purchasing entities must qualify under section (t) below, which must be initialled.)
(l) an individual who, either alone or with a spouse, has net assets of at least $5,000,000;
(m) a person, other than an individual or investment fund, that has net assets of at least $5,000,000 as shown on its most recently prepared financial statements;
(n) an investment fund that distributes or has distributed its securities only to:
  1. a person that is or was an accredited investor at the time of the distribution,
  2. a person that acquires or acquired securities in the circumstances referred to in sections 2.10 [Minimum amount investment] or 2.19 [Additional investment in investment funds] of NI 45- 106, or
  3. a person described in paragraph (i) or (ii) that acquires or acquired securities under section 2.18 [Investment fund reinvestment] of NI 45-106;
(o) an investment fund that distributes or has distributed securities under a prospectus in a jurisdiction of Canada for which the regulator or, in Québec, the securities regulatory authority, has issued a receipt;
(p) a trust company or trust corporation registered or authorized to carry on business under the Trust and Loan Companies Act (Canada) or under comparable legislation in a jurisdiction of Canada or a foreign jurisdiction, acting on behalf of a fully managed account managed by the trust company or trust corporation, as the case may be;
(q) a person acting on behalf of a fully managed account managed by that person, if that person:
  1. is registered or authorized to carry on business as an adviser or the equivalent under the securities legislation of a jurisdiction of Canada or a foreign jurisdiction; and
  2. Ontario, is purchasing a security that is not a security of an investment fund;
(r) a registered charity under the Income Tax Act (Canada) that, in regard to the trade, has obtained advice from an eligibility adviser or an adviser registered under the securities legislation of the jurisdiction of the registered charity to give advice on the securities being traded;
(s) an entity organized in a foreign jurisdiction that is analogous to any of the entities referred to in paragraphs (a) to (d) or paragraph (i) in form and function;
(t) a person in respect of which all of the owners of interests, direct, indirect or beneficial, except the voting securities required by law to be owned by directors, are persons that are accredited investors;
(u) an investment fund that is advised by a person registered as an adviser or a person that is exempt from registration as an adviser, or;
(v) a person that is recognized or designated by the securities regulatory authority or, except in Ontario and Québec, the regulator as an accredited investor.

 

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