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Growth Works:Get a $1,500 tax break without investing an extra penny

Thoughts?

   

I'll give you a tax break....just give me what you owe the government!

   

I don't know. This smells an awful lot like ACOA.

   

Hey Scape I have a plot of land that I can sell you it is a great tax right off, has a nice little house on it, i will let it go cheap..say 10 grand, the addy is 24 sussex. What you say dude?

   

To see how these funds have been doing, take a look at this list and click on the chart link at the right for each fund. Any funds that have been around awhile have gone down recently in price. Others have never gone up.

http://globefunddb.theglobeandmail.com/ ... UBLIC_FUND

From the sales prospectus:

"You can’t redeem or transfer your Shares until you’ve owned them for 8 years (except in very limited circumstances and you may be required to repay the federal and provincial tax credits). There’s also no guarantee that WOF will be able to honour all redemption requests at any time."

What's that saying? If it sounds too good to be true, it probably is?

   

It means it can't guarantee a return if there is a run, no one can. Still the returns are good.

   

I am a Financial Advisor, and I can tell you that the tradeoff in the loss of returns vs the extra tax break is just not worth it.

I have yet to come across an investor who has done well on those funds.

But if you really need the tax break, then go for it.

Short term gain for long term pain.

   

Why LSIF (pdf)

Overall I see your point however if there is an up and coming stock and it happens to be in BC (and BC economy is booming after all) then does it not stand to reason that this is a way to get two mints in one? A tax break and a returning dividend?

   

Scape,

Yes, very true. In fact if one company hits it big (eg. Hot House a few years back), then the returns are boosted big time.

However, the trade off over the 8 years, in general, is not worth it for a short term tax break.

   

Then considering the boom in construction in BC from 2010 Games it would be like fish in a barrel. Some simple commodity such as cement is only going to go up in the next 4 years at least. You could even invest in coal as China has been only buying more and more of us as of late. Sounds like a safe bet.

   

Can also get dragged down by any investments that tank though.

   

That is the risk of investing in to the free market. You have to admit the odds are heavily stacked in the investors favor and this also has the added bonus of helping keep investment in BC. Not that I would suggest risking money on patriotic causes but if it catches on it would create its own lift to the market as well.

   

Courtesy of Globefund:

WOF Balanced Series 1 (Inception date 1992):

Returns as of January 31, 2006
Fund Group Avg Index*
1 month 1.20% 0.33% 8.68%
3 month -0.78% 2.64% 21.04%
6 month -2.44% 1.19% 21.07%
1 year -5.95% 1.42% 29.67%
3 year -2.74% -1.54% 28.33%
5 year -9.19% -7.83% 15.99%
10 year 3.35% 0.26% 11.64%
15 year n/a 1.54% 12.75%
20 year n/a 4.01% n/a
Since Inception 3.08% n/a n/a
3 year risk 5.81 7.32 14.35
3 year beta 0.15 0.12 1.00
* Index refers to BMO Nesbitt Burns Cdn Small Cap Index

   

Series 2 (Inception date 2004):

Returns as of January 31, 2006
Fund Group Avg Index*
1 month 1.08% 0.33% 8.68%
3 month -0.79% 2.64% 21.04%
6 month -2.85% 1.19% 21.07%
1 year -6.48% 1.42% 29.67%
3 year n/a -1.54% 28.33%
5 year n/a -7.83% 15.99%
10 year n/a 0.26% 11.64%
15 year n/a 1.54% 12.75%
20 year n/a 4.01% n/a
Since Inception -6.82% n/a n/a
3 year risk n/a 7.32 14.35
3 year beta n/a 0.12 1.00
* Index refers to BMO Nesbitt Burns Cdn Small Cap Index

Saxon Small Cap Fund

Returns as of January 31, 2006
Fund Group Avg Index*
1 month 6.50% 6.94% 8.68%
3 month 16.22% 17.85% 21.04%
6 month 12.87% 15.52% 21.07%
1 year 19.62% 26.20% 29.67%
3 year 25.04% 25.71% 28.33%
5 year 19.03% 14.80% 15.99%
10 year 16.99% 13.34% 11.64%
15 year 16.01% 14.36% 12.75%
20 year 11.53% 12.38% n/a
Since Inception 11.43% n/a n/a
3 year risk 12.58 14.09 14.35
3 year beta 0.78 0.83 1.00
* Index refers to BMO Nesbitt Burns Cdn Small Cap Index

   

The pitch is geared towards RRSP investors looking for a higher return, invest local and still keep a safe investment. Does this not then meet that target group and is there any way that returns could be improved without going to short term investments?

   

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