Ninepoint High Interest Savings Fund (NSAV) Waives Management Fee to 0% for Series F and Changes Investment Objectives
Ninepoint implements changes in the wake of recent clarifications announced by the Office of the Superintendent of Financial Institutions (OSFI).
The Canadian cash and money market ETF and mutual fund landscape is about to undergo a shift. One of those leading the way is Ninepoint Partners LP, which recently announced a set of significant changes for the Ninepoint High Interest Savings Fund (NSAV).
On August 3rd, 2023, Ninepoint effectively expanded the fund's investment objective and temporarily waived the management fee for NSAV. This allows the Fund to also invest in high-quality money market securities and comes in the wake of recent clarifications around cash-like ETFs announced by the Office of the Superintendent of Financial Institutions (OSFI).
Moreover, until the earlier of June 30, 2024 or the Fund's net asset value (NAV) exceeding $1 billion, Ninepoint Partners will temporarily waive NSAV's 0.14% management fee for the ETF Series, and Series F to 0.00%. The Series A management fee will be reduced from 0.39% to 0.25% under the same terms.
Here's all you need to know about investing in NSAV.
Overview of NSAV
Previously, NSAV invested solely in high interest-paying cash accounts offered by Schedule One Canadian banks, which allowed it to payout monthly interest income. The gross annual yield on NSAV moves in lockstep with prevailing interest rates. As of Jule 13th, the current interest rate for NSAV is 5.39%*
By expanding NSAV's investment objectives to also include money market instruments (like high-quality commercial paper, Bankers Acceptances and Treasury bills), Ninepoint is attempting to get in front of the anticipated upcoming OSFI regulations that may reduce the yield or availability of high interest deposits at Schedule One Canadian banks. This change has turned NSAV into one of the more attractive money market ETFs available on the Canadian market given the fee holiday.
“By expanding the universe of securities available to NSAV to include both high interest deposits and traditional money market type securities, we get the best of both worlds; enhanced flexibility and access to a larger universe of securities to generate low-risk yield for investors.” says Mark Wisnieski, Partner and Senior Portfolio Manager at Ninepoint Partners.
The temporary reduction of the management fee from 0.14% to 0.00% is a rare move in the Canadian industry which may help attract more investors’ capital. This could greatly benefit NSAV, making it the lowest fee HISA/money market fund in the industry during this temporary period.[1]
†As of previous close. ‡ Inception Date: August 05, 2010
[1] Trackinsight data as of August 17, 2023
*The interest rate on the underlying investments of the fund is effective as at July 13, 2023 and is subject to change. The interest rate may not represent your individual return as the fund is subject to Management Fees on Series A of 0.25%. The Manager currently absorbs all other expenses.
Please note this article is for information purposes only and does not in any way constitute investment advice. It is essential that you seek advice from a registered financial professional prior to making any investment decision.
The Fund is generally exposed to the following risks. See the prospectus of the Fund for a description of these risks: Borrowing risk; Credit risk; Cybersecurity risk; Inflation risk; Interest rate risk; Market risk; Series risk; Substantial securityholder risk; Tax risk; Absence of an active market for ETF Series risk; Halted trading of ETF Series risk; Trading price of ETF Series risk. Ninepoint Partners LP is the investment manager to the Ninepoint Funds (collectively, the “Funds”). Commissions, trailing commissions, management fees, performance fees (if any), and other expenses all may be associated with investing in the Funds. Please read the prospectus carefully before investing. The indicated rate of return for Class F shares of the Fund for the period ended July 31, 2023 is based on the historical annual compounded total return including changes in share value and reinvestment of all distributions and does not take into account sales, redemption, distribution or optional charges or income taxes payable by any unitholder that would have reduced returns. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The information contained herein does not constitute an offer or solicitation by anyone in the United States or in any other jurisdiction in which such an offer or solicitation is not authorized or to any person to whom it is unlawful to make such an offer or solicitation. Prospective investors who are not resident in Canada should contact their financial advisor to determine whether securities of the Fund may be lawfully sold in their jurisdiction.
