BMG Funds offer a number of benefits:
Liquidity
Liquidity of the units is comparable to bullion itself. The only variable affecting the price of units in the Funds is the daily spot price of gold, silver and platinum, in addition to the expenses of the Funds themselves. The liquidity means investors can convert their units into cash at any time. Because none of the bullion in the Funds is borrowed, leased or used as collateral, investors will never be forced to pay a discount to the Funds' net asset value (NAV) upon redemption. BMG Funds are as liquid as any money market fund.
Open-End Mutual Fund Trust
BMG Funds are open-end mutual fund trusts, which means new investors can buy in at any time, thus growing either Funds in unit size and asset value. Unlike closed-end funds, which maintain a fixed number of shares, BMG Funds continually creates new units as investors buy in.
Fixed Investment Policy
BMG Funds have a fixed investment mandate of purchasing either all gold bullion in the BMG Gold BullionFund or equal dollar amounts of gold, silver and platinum bullion in the BMG BullionFund. BMG Funds do not invest in certificates or futures contracts. Style drift is not possible. The Funds' performance is not dependent on the trading skills of a manager. Purchases are not market-timed and the holdings are not rebalanced. The Funds do not employ any leasing or hedging strategies.
Secure Custodial Arrangements
The Funds' Manager has a written Custodial Agreement with Scotia Mocatta. Sub-custodians must meet Securities guidelines and must be approved by the Manager. The Funds' bullion holdings are allocated and segregated, and insured by Scotiabank. The bullion is held in trust for the unit holders and is not subject to any third-party claims, including those of Scotia Mocatta, RBC Dexia or Bullion Management Services Inc. Serial numbers and exact bar sizes are recorded for every bar held in custody. The bullion holdings are audited annually by the Fund’s auditors, KPMG LLP.
Cost Effectiveness
Retail bid-ask spreads, bar charges, commissions and delivery costs can account for upwards of 15 percent of the cost of investing in bullion with other bars dealers. With other dealers availability of allocated and segregated storage is limited and insurance is unavailable for investors to purchase on individual basis. The exception is BMG BullionBars . Conversely, BMG Funds purchase bullion at the prevailing market price. Units of BMG Funds are purchased and redeemed at Net Asset Value (NAV). Unitholders are never forced to pay a premium to the Funds' NAV when they buy, or a discount when they sell units in the Funds*. This is not the case with closed-end funds.
Third-Party Administrator
RBC Dexia Investor Services Trust is responsible for BMG Funds’ banking, record keeping and daily valuation. RBC Dexia processes all redemptions and purchases and pays authorized Fund expenses.
Convenience
BMG Funds offer the ultimate in convenience for investors, who can purchase by phone or online through all major banks, brokers and mutual fund dealers, and all administrative and storage requirements are taken care of by BMG Funds.
Absolute Security
The bullion is stored on a fully allocated and segregated basis with the Bank of Nova Scotia, and is insured against all perils except for war, nuclear incident and government confiscation.
Transparency
As a public mutual fund approved in all provinces in Canada, the Fund must comply with all securities regulations, including filing and reporting requirements. The NAV and the NAV per Unit, as well as Fund performance and other key facts, are reported on GlobeFund, Morningstar, Bloomberg, Cannex, Fundata and NAV Global.
Tax Efficient
No sales tax or withholding tax is applicable on bullion in Canada. All tax consequences on redemptions flow through to the redeeming unitholder. BMG Funds are approved for all Canadian registered plans, including RRSPs, RRIFs and RESPs.
Peace of Mind
There is no substitute for the peace of mind an investor gains by owning an asset that is real, incapable of being destroyed or depreciated, and absolutely secure. During turbulent economic times like these, safety, preservation of capital and absolute security are essential. BMG's commitment to security means that the assets in BMG Funds are fully transparent, insured and verified during the annual audit.
