How They Benefit Canadians

Canadian Income Funds contribute to the health and sustainability of our regional and national economies. They generate significant economic growth, productivity, reinvestment and jobs.

Individual unit holders can benefit from Income Funds in two ways: First, they receive regular cash distributions. Second, as the price of units goes up and down in the market, investors can make capital gains if they sell their units for more than their purchase price.

Many Income Funds offer a steady, yet predictable flow of cash to investors often with a better rate of return than traditional interest-bearing holdings such as guaranteed investment certificates (GICs) or Canada Savings Bonds. But each Income Fund’s rate of return is an expected, not guaranteed, yield, which can decline. Unit values may fluctuate based on market forces, and regular payments to unit holders can increase or decrease based on business performance.

At present, more than one million Canadians across the country own units in Income Funds and several million other Canadians invest in Income Funds indirectly through mutual funds. A large and growing segment of unit holders are retirees or baby boomers preparing for retirement who are attracted by the regular payments offered by Income Funds. Large investor groups, such as the Canada Pension Plan and the Ontario Teachers Pension Plan, invest on behalf of their clients in Income Funds.

Income Funds have increasingly becoming a key component of Canada’s capital markets and common within Canadians’ investment portfolios, as well as important vehicles for Canadian businesses to generate the capital they need to grow and thrive. For more information on Income Funds, please visit the Canadian Association of Income Funds website at: www.caif.ca