Mutual Fund Trust (MFT)


Current Opportunities

MFT’s are flow-through structures for tax purposes. The fund’s income can be reduced by the expenses it incurs, and the fund does not pay tax on its income. Instead, the MFT distributes all its net income to the MFT unit holders who pay their own tax at their specific tax rate. The MFT, however, can apply its expenses towards its income that is less tax efficient (interest income for example) and distribute more of the other forms of income that is more tax efficient (capital gains and dividends).

By acquiring units of a “Private Mutual Fund Trust” investors retain ownership of the trust and all of its assets directly.

Some of the benefits associated with MFT’s are:

  • Invested capital supported by the underlying assets of the MFT
  • Variety of ways an investor’s capital and income can appreciate through the many varieties of investment terms MFT’s provide.
  • Potential tax benefits from fund managers applying expenses to tax inefficient income prior to distributing the net income to the investors.
  • They are eligible for any type of cash or registered vehicle such RRSP, TFSA, LIRA, RESP, etc.