Matrix fund aims to mimic ETF benefits

By Staff | November 25, 2011 | Last updated on November 25, 2011
2 min read

Matrix Funds Management has launched Canada’s first corporate class mutual fund based on a dedicated covered call strategy.

The Matrix Covered Call Canadian Banks Plus Fund (Corporate Class) is designed to receive dividend and option premium income by investing in dividend paying securities in the Canadian financial sector and employs a dynamic covered call option writing strategy.

“Our research indicates there are $44.7 billion in assets in 350+ Corporate Class funds, almost all using traditional active management,” says Grahame Lyons, Managing Partner, Matrix. “We saw an opportunity to provide investors with more choice and a proven investment strategy.”

The majority of the fund’s assets will be invested in Canada’s largest commercial banks, Lyons explains. Call option premiums are expected to increase income generated in the fund, reduce volatility and provide some downside risk protection. On top of that, the fund will make investments in other Canadian financial sector dividend paying securities with the aim to further increase dividends, option premium income or long term capital appreciation.

The company is targeting the ETF market with this launch, saying that the new fund provides similar benefits as ETFs: low cost, portfolio transparency and tax efficiency. Since ETFs are not available to advisors who are solely licensed with the MFDA, the company thinks if has found a niche in the market.

“The conservative options strategy of covered calls has been around a long time and is popular in exchange-traded products through closed-end funds and ETFs,” said David Levi, CEO. “We see a great opportunity to introduce this covered call option strategy to a broader audience in a traditional mutual fund with unique corporate class share benefits that also provides monthly income.” staff


The staff of have been covering news for financial advisors since 1998.