Why Choose Pavilion Funds for Your Future Investments?
Pavilion funds differentiate themselves in the Flow-Through field by seeking an absolute return on investors’ capital and not relying on just the tax benefits to provide returns
Active Management with Wind-down
Other flow-through funds are short-term, between a year or two long, at which point, all the assets are then rolled over into an open-ended mutual fund. After the rollover, the investor then has the choice of whether to continue holding the mutual fund, with all the investments in it, or sell the mutual fund, which means all the investments in it will be sold at once. As it is unlikely that all the individual companies held in the mutual fund will be in the same stage of exploration, they’ll therefore have different ideal times to sell, and investors lose the opportunity to maximize their gains on each company.
Conversely, Pavilion doesn’t rollover. Instead, right from the opening of the fund, each company is sold when the fund manager believes the time is appropriate, returning cash to investors along the way. This allows these smaller companies the time required to become more valuable, rather than just be a quick tax benefit to the investor.
Exploration vs Production
Unlike many other flow-through funds, which invest in companies in the production phase, Pavilion invests solely in the exploration phase. This means that investors in Pavilion are able to take advantage of the exploration deductions, known as Canadian Exploration Expenses (CEE). Whereas production expenses are only deductible on a declining 30% basis, exploration expenses are 100% deductible in the year of investment.
Since its inception, Pavilion has been the top-performing flow-through fund in more years than any of its competitors.
In addition, to date, the 2008 Pavilion fund ended up having the highest return to investors of all flow-through funds in the market*, returning 136.8% on money invested, even before taking tax benefits into consideration.
How Pavilion Differs from Other Flow-Through Funds
As can be seen above, Pavilion sells shares of specific companies over the life of the fund. This helps to maximize the gain per company invested in. With other funds, investors don’t receive the benefit of selling specific companies at opportune moments, and when they want to exit, the sale of mutual fund units means getting rid of all companies at once, whether the timing is right for all the companies or not.
How to Invest &
What to Expect
Potential investors should talk to their advisor and tax expert to determine if Pavilion makes sense for their particular situation, and to determine their eligibility to invest, based on their provincial exempt market investment requirements. If it makes sense to go forward, they can invest in Pavilion with a minimum purchase of $10,000. The money in Pavilion will then be used in the year of investment to purchase flow-through shares of eligible Canadian companies. The following April, the investor will receive a T-5013 tax slip, which they can use when filing their taxes for the previous year, in order to deduct the investment from their income. Each following year, the investor will receive another T-5013 allowing them to make further, small deductions, based on expenses of the Pavilion fund itself.