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BEST AVAILABLE COPY SECTION THE HERALD February 17 Pages Getting to know no loads mutual funds By BRIAN THHIPPtETON Special No loads arc mutual funds no frontend loads Front end loads vary from 1 to per cent They therefore can cut into your Invest ment In or out of an If you were to pay per cent for example you would only be investing of your That figure Is rare now as most charges fall within lower limits and per cent is closer to the average Almost all the load goes back to the dealer and the represen tative receives SO to per cent of the amount the rest going to defray office expenses The money Is well spent if the ad vice is accurate and timely as it could be and results In the net worth of the client being increased beyond what he could have done for himself However there ore people who decide on their own funds and do not need much In the way of service For them some of he malar Investment companies have Introduced no front end load funds with an eye on the RSP market which runs into the billions of dollars AGF is one such company one of the largest in Canada with over billion invested It operates some top performing funds suitable within or without an Canadian Security Growth Fund which invests in Canadian bluechip corporations Canadian Trusteed Income Fund which invests In all government bonds and Money Market Fund which offers a rate in interest higher than you would nor mally get on your bank deposits What AGF has done is to introduce three funds under the name Excel which invest in those three funds but without a load Thus the Excel Equity Fund invests In proven Cana dian Security Growth Fund while Excel Bond Fund and Excel Money Fund invest In other two funds If you leave the funds for seven years you pay no exit fees you cash them out then you pay a pro rata fee on the invested amount not the ac tual amount Mackenzie another of our biggest and most successful fund operator with the Industrial Group of Funds has introduced the Horizon Fund a year ago Before October IB it was primarily a cash fund Horizon Fund has no fees If you re tain them for years If you cash them out before that there is a half per cent per year up to four and a half per cent You can switch between funds at no cost according to market condi tions and Interest rates Your dealer should advise you when that is ap propriate What rate of return might you expect Over ten years the top AGF funds have averaged over per cent per year average annua compound growth This allows your money double in four years The Industrial Growth Fund has averag ed 17 per cent over lhc past ten years allowing holders to triple their Investment in seven years Compare this with what you are do ing with your now You might consider putting half your money in equity funds half to fixed Income as Excel allows you lo do provided you have ten or more years before you need to turn your RSP into a Registered Retirement Income Fund the age of and over If you want to know more contact a mutual fund specialist and read the Information ho or she will supply In the prospectus and the literature This printed material is heavily regulated by the Ontario Securities Commission so you need not fear misleading advertising If you to slay with the bank or trust company then go ahead But Just make sure you do not buy a guarantee to alter Inflation and eventual taxation cat into your capital With equity funds you also gain capital gains dividends and in terest reinvested and over the long haul It is one of the chief reason for the high rates of growth Brian Thrlpplelon with Investment Planning Ltd Suit SOS Dorvnl Drive Oaktille Cor porate Centre SAME DAY TAX RETURNS The RRSP spousal trap A married taxpayer may pay a premium to a Registered Retire ment Savings Plan of which his or her spouse is the owner and annuitant and deduct the amount in calculating his taxable in come This provision doesnt in crease the amount of eligible con tribution available to the Individual It does allow a taxpayer to make payments to a combination of plans for himself and his spouse a per sonal only or to a spousal only within the limits specified by the legislation Proper ty used a spousal RRSP can provide an excellent vehicle for current tax planning as well as for income split- ling in retirement yean There are however two areas which merit par ticular attention withdrawals and contributions by the annuitant owner If the spouse who owns the plan withdraws funds from a spousal RRSP either before or after the retirement income begins the withdrawal could be attributed back to the spouse who made the contribu tion If a specified waiting period Isnt observed The attributed amounts will be the contributions deductible by the contributing spouse for the year of withdrawal and for the preceding two taxation years This means three full taxa tion years must elapse without a contribution to a spousal plan before a withdrawal from a spousal would not be attributed to the con tributor This rule does not apply If the withdrawal Is made as a result of a marriage breakdown and certain conditions are met As an example of the operation of the legislation consider the case of Mr and Mrs A Assume that Mr A has made deductible contributions to a spousal of for each of 1962 1963 and 1985 If Mrs A withdrew from the contract in 1965 then Mr A would be required to include in Income the amount of deductible contribu tions made in 1865 the year of withdrawal and the previous two taxation years Any amount withdrawn in excess of would be taxable to Mrs A The second major issue involving spousal RRSPs Involves contribu tions by the annuitant Assume that Mr contributions are identical to those in the previous example ex cept that In 1965 Mrs A made a contribution in addition to Mr A con tri button Assume that was withdrawn in 1965 The ordering of the attribu tion of the amount withdrawn to Mr A is of fundamental Importance Form TUOSDeregistered Spousal RRSPs must be completed by Mrs A The form is to be used in calculating the amounts to be includ ed in the incomes of the annuitant and the contributor The form re quires the be listed as In the following schematic Amount reported to Mrs A on Subtract Amounts contributed to Mr A to under which Mrs A is or was the annuitant that Are by Mr A In Were Deductible by Mr A In and 1983 Amount taxable to Mrs A Ml Amount taxable to Mr A The legislation provides that even though Mrs A contributed to the in 1BBS the would be at tributed to Mr A If were withdrawn no amount could be tax able to Mrs A until the full of contributions for 1983 1984 and made by Mr A hove been Included in his Income Since a number of circumstances could lead lo the necessity of withdrawing a lump sum from an It appears Important that an nuitants under a spousal do not contribute to the spousal but to plans In their names which are not spousal RRSPs Courtesy Mntnal Life of Canada The RRSP Advisor THE NORTH HALT0N YMCAS are offering TWO FINANCIAL SEMINARS UNDBISTANDHG THE STOCK MARKET Mon Fei 29 1988 700 IfcOO Pm Hills Cultural Centre INVESTMENT STRATEGIES Mon March 1988 1fc00 pun ST- JOSEPHS SEPERATE SCHOOL LIBRARY ACTON Thesa writ eg given by Stephen Fagyas and Stave account executes with prudential Securities They have Investment backgrounds and COST parte 2500 to both Time to take a look at financial planning Financial Planning simply means determining your short- term and longrange financial goats and developing a strategy to achieve them It goes beyond liv ing within your means At the very least it involves effectively putting to work whatever dollars ore surplus to your basic living costs Personal financial planning once regarded as exclusively for the wealthy is becoming accessi ble to more and more Canadians of average means And increas ingly they are rinding that such counsel is a worthwhile invest ment in itself For further information con tact Life Underwriters Associa tion of Canada 41 Rd Don Mills Ontario M3B 2T3 or speak to your local life underwriters association MONEY CONCEPTS Hills Do You Shop For The Best JEFFREY A IRVINE MJt CFP PtMjdflt At Money Concepts we do the shopping for you Over 40 banks and trust companies Over 60 insurance companies Over 1 00 mutual funds We find the BEST product for you in RRSPs Guaranteed Investment Certificates Mutual Funds Life and Disability Insurance Call 8731 today and let us do the shopping for you 348 Street Georgetown 8731877