1295 Cornwall Rd, Unit 3, Oakville, ON L6J 7T5
Tel 416.847.5900 Fax 416.847.5902
Please contact Michael Lippi, Vice President, Client Service & Sales at 416.847.5900 x 219
About Your STYLUS Investment
STYLUS offers “pooled funds”. What is a pooled fund? A pooled fund is similar to a mutual fund in that investors “pool” their money together in one fund. However, pooled funds are generally geared toward the high-net worth investor as they typically have higher minimum investment amounts.
Like mutual funds, pooled funds offer investors the advantage of diversification, access to professional money managers, and operational cost efficiencies. Also, like most mutual funds, pooled funds are “open-ended” and thus do not trade on any stock exchange. Instead, they are bought and sold at their “net asset value” (NAV), the price that reflects each unit’s pro-rata ownership of the underlying net assets in the fund.
Mutual funds are sold to the public via a disclosure document called a prospectus. Pooled funds, by contrast, are sold via private placement, with a disclosure document called an offering memorandum which offers the fund greater flexibility. Mutual funds are frequently sold to investors by third parties such as investment advisors, financial planners, discount brokerages, etc. Pooled funds are normally offered directly to clients of the investment firm that manages the fund and are sold directly by the management company; thereby eliminating the additional layer of a salesperson. Net asset values are usually calculated for mutual funds on a daily basis, whereas the net asset values for pooled funds may be calculated less frequently.
Each of our funds was created to reflect a certain style of investing and to accommodate investors with similar risk/reward profiles. Clients become unitholders of a fund, owning a certain number of units based on the amount they invest. Pooling assets this way is the best way to ensure all our clients are treated fairly and allows us to keep our costs, and subsequently our fees, low.
Once I have invested, can STYLUS access or withdraw any of my money?
No. A custodian holds the assets owned by each STYLUS pooled fund. STYLUS controls the investment portfolio decisions but we cannot access or withdraw assets in any of the funds. Only our clients have the authority to withdraw funds from their accounts, subject to the completion of a redemption form, signed by the client, which is submitted to the custodian.
What wealth management services do you provide?
STYLUS is a wealth management firm geared toward high net worth individuals, families, and corporations. We provide our clients with in-house investment fund management, personalized asset management strategies, as well as retirement & financial planning services.
Who is STYLUS’ custodian/trustee?
We have selected RBC Investor & Treasury Services (RBC) to act as the custodian and trustee for each of our funds. RBC operates Canada’s largest custody business and is wholly owned by the Royal Bank of Canada.
STYLUS can trace its roots back to 1984 to CPMS, a research and analytics firm providing information to portfolio managers, mutual funds, and investment advisors across North America. In 1994 CPMS established its own investment team to manage internal funds. Ten years later, in 2004, these funds were spun out under the management of STYLUS Asset Management. When CPMS was sold to Morningstar in 2009, STYLUS remained as an independent investment firm. Today STYLUS offers five funds to suit our investors’ specific investment goals:
Momentum - Invests in companies with explosive earnings growth
Growth - Invests in highly profitable, reasonably-priced companies that reinvest a significant portion of their profits back into the company
Value with Income - Invests in reasonably-priced companies with high dividend yields and superior profitability
Wealth Protection - Invests in large, conservative companies and diversified fixed income securities
U.S. Blended Equity - Invests in a combination of value and growth companies
What responsibilities does the custodian have?
In addition to holding the assets owned by each of the STYLUS funds, the custodian carries out the record keeping function on behalf of the funds, collecting and compiling unitholder information independent from STYLUS and sending out important tax documents to each unitholder after year-end as well as quarterly client account statements. The custodian also acts as trustee for each fund, helping to ensure that STYLUS complies with relevant legislation and tax requirements.
What type of accounts do you manage?
Our funds may be held within: RRSP, Spousal RRSP, LIRA, RRIF/LIF, TFSA, Non-Registered/Cash Account, Joint Account, and by a Trust or Corporation.
How often are the funds valued?
Our funds are valued on the last day of each month. This also means that clients can purchase additional units or redeem units only at month end.
What is the process of becoming a client of STYLUS?
As most of our new clients are referred to us from existing clients, they have a general understanding of who we are and what we do. However, every potential client will first meet with a representative from STYLUS who will take them through a STYLUS introductory meeting. The meeting provides them with an overview of our firm, our team, and the benefits of working with us. From there, an additional information and planning session is completed to allow us to prepare an investment plan based on their specific needs. All of our clients then receive regular updates throughout the year, invitations to our client events, and the ability to speak with the STYLUS team whenever they wish.
Is there a minimum account investment?
Yes. Our minimum initial investment is $500,000 per household – this can be a combination of both registered and non-registered investments from an individual, couple, trust or corporation.
Is there a minimum fund investment?
Yes, there is a minimum investment of $100,000 per fund. The minimum subsequent investment in an existing fund is $5,000.
Who will be managing my money?
Our investment team works together to actively manage the STYLUS funds ensuring that they are maintained in accordance with our specific investment criteria. Individually, they are highly experienced, accredited investment professionals who believe deeply in our disciplined investment philosophy and are all personally invested in the STYLUS funds alongside our clients.
Who do I talk to when I have questions about my investment? How will I be kept up to date?
While each of our clients has a primary service manager, we believe in a team approach to client servicing; allowing any member of the STYLUS team to assist our clients. We are also committed to meeting with our clients individually on a regular basis to keep them updated on their accounts, and to review any issues or changes related to their overall investment and financial planning goals.
Regular reporting includes monthly account statements, quarterly market & fund reports, newsletters, email updates, investment overview presentations, and information sessions to provide additional wealth management information. Additionally, clients can access their accounts and performance at any time from our website via their secure personal login.
Do you work with other professional advisors that your clients use?
Absolutely. Many of our clients look to us to co-ordinate the financial planning process between their existing professional network of accountants, lawyers, and other advisors. Additionally, we are also able to recommend a professional advisor from our network for those clients who are not already working with someone.
How do I open an investment account?
New investors must complete a set of “New Client” Forms which include: an account application, a client information form, a subscription agreement, and either an Accredited Investor Form or Managed Account Agreement (depending on the client’s account profile). For non-registered accounts, cheques are made payable to “RBC Investor Services Trust in Trust for STYLUS Pooled Funds” and may be post-dated to the last business day of the month. Also, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) requires us to “identify” new clients, typically by viewing, in person, an original identification document such as birth certificate, driver’s license or passport.
Can I transfer between STYLUS Funds?
A transfer, or switch, between funds is considered a redemption and new purchase. As long as the fund you are transferring to holds the minimum $100,000 investment amount, you may move your holdings between funds. Non-registered accounts are subject to tax on any gains incurred as a result of the transfer.
Can I easily withdraw my funds and are there any fees charged to redeem?
Clients have full access to their investment funds. As we value the funds monthly, redemption requests received 10 days prior to month end will be processed at the end of each month. Funds will be sent electronically, by the custodian, to your requested bank account. As long as your account with STYLUS has been open for a minimum of three months there are no fees associated with your redemption.
Are there any fees associated with my investment?
As with any investment fund, there are certain fees applicable to the management of your investment. At STYLUS the following fees apply on a per fund basis: management fees, performance fees (when applicable), and operating expenses of the fund.
What type of assets, or companies, is STYLUS investing in?
All of our funds are invested in North American equity markets (i.e. shares of publicly traded companies). Our Wealth Protection fund also invests in income-oriented investments. All funds typically have a small cash component to allow us to act quickly when new investment opportunities arise.
How do you manage risk?
What sets STYLUS apart from most other firms is the disciplined, rules-based investment approach we pioneered over 30 years ago. This investment philosophy actively manages risk as we monitor our portfolio daily for the characteristics of each individual holding. Strict limits on the maximum number of stocks within a sector further ensure risk is managed through strong sector diversification. Additionally, we only invest in publicly traded investments that are considered highly liquid (easily bought and sold), and we do not take on the risk associated with investing in penny stocks, or equity derivatives.
Who Is The STYLUS Client?
Our clients are as unique as we are. While our clients have a minimum of $500,000 to investment, we have clients of all ages and backgrounds. What they all have in common is that they have come to us looking for something more from their wealth manager and have chosen STYLUS simply because they trust us to always do what is best for them and help them secure their financial future.
What Is The Process of Becoming A STYLUS Client?
As we place a strong emphasis on getting to know all our clients, our process begins with a meeting with a STYLUS representative. This meeting will provide an overview of the firm, team, and benefits of working with us. From there, we will setup an additional meeting to prepare a personalized investment plan and familiarize you with how we provide our clients with support and on-going personalized service.
Can I transfer assets from another institution?
Yes. You may transfer both registered (i.e. RRSP, RRIF, TFSA) and non-registerd assets. In order to transfer your assets from another institution, you need to complete a Transfer of Registered Assets Form. As STYLUS can only accept cash for investment, the holdings in your existing registered account must be liquidated (either fully or partially) before they can invested in our funds. This process typically takes three to four weeks and STYLUS will manage this process on your behalf.
What are the tax consequences of investing in the STYLUS funds?
As each client’s situation is unique, we advise our clients to consult their tax advisor with tax questions specific to them. Investors in non-registered accounts are subject to tax on interest income earned, dividends received, and realized capital gains. Investors with non-registered accounts will receive a T-3 tax slip toward the end of March if the fund makes a capital gain and/or income distribution.
Are the fees I pay to STYLUS tax deductible?
No. Like most other mutual and pooled funds, our fees are paid directly from the funds we manage. These fees, along with other fund expenses, are deducted from the income earned by the funds and this net income, is distributed to the unitholders each December. To avoid “double counting”, you cannot deduct these fees as a carrying charge on your tax return as they are already deducted at the fund level.
Are distributions paid out to investors in cash or reinvested in the fund?
Distributions (completed each December) are automatically reinvested into the funds. As such you will receive additional units in the fund you are invested in rather than additional “cash”.
Do I have to pay tax when I redeem my funds?
Redemptions from non-registered accounts are subject to capital gains tax. Tax is calculated on one-half of the difference between the proceeds of the redemption and the adjusted cost base. If the proceeds are less than the adjusted cost base, a capital loss is realized. This information is summarized on your quarterly account statement issued by our custodian, RBC.
How do I know if I have had a capital gain or loss on my investment?
Your quarterly client statement from RBC will show gains / losses under the section entitled “fund sales and capital gains/losses.”
What tax slips will I receive?
a. T3 (when applicable, in late March)
b. RRSP Contribution Slips in mid-March
c. T4 RRSP or T4 RIF (for RIF, LRIF, LIF) in mid-March
These tax slips are issued by RBC.
What is a Dollar Weighted Rate of Return (DWRR) vs Time Weighted Rate of Return (TWRR)?
DWRR is the investment return generated by your account, including the cash flows (money coming in and out of the account). It is used to evaluate the performance on your individual investment account. TWRR is the investment return generated by a fund excluding cash flows (money coming into an out of the fund). It is used to compare investment products and for evaluating fund managers.
Why Does STYLUS Use DWRR?
The Canadian Securities Administrators have mandated that all investment firms now provide Dollar Weighted Rate of Return (DWRR) reporting to their clients. DWRR is more meaningful to our clients as it lets you know exactly how your individual investment is performing based on the inflows and outflows in your account over time.