Central GoldTrust and Silver Bullion Trust File Management Information Circulars and Purpose Investments Provides Update on Benefits of Conversion to ETFs
Marketwired
TORONTO, ON--(Marketwired - December 07, 2015) - Purpose Investments Inc. ("Purpose"), manager of the Purpose family of exchange-traded funds ("ETFs") and mutual funds is pleased to announce that Central GoldTrust and Silver Bullion Trust (together the "Funds") have each filed a Management Information Circular ("Circular", together the "Circulars") for unitholder meetings to be held on January 26, 2016 to consider and vote on the proposed conversion of the Funds into ETFs ("ETF Conversions"). The Circulars are available on the Funds' websites at www.goldtrust.ca and www.silverbulliontrust.com, on SEDAR at www.sedar.com and, in the case of Central GoldTrust, on EDGAR at www.sec.gov. Unitholders will also receive a paper copy of the Circular by mail, unless they have previously opted to not receive securityholder materials. The proposed ETF Conversions have the unanimous support of Central GoldTrust's and Silver Bullion Trust's independent trustees and represent an exciting opportunity for unitholders of the Funds.
Upon the successful completion of the ETF Conversions, units of the Funds are expected to trade in-line with their underlying net asset value ("NAV"). The ETF Conversions should eliminate any material future discounts to NAV and provide unitholders with significantly enhanced two-way liquidity, consistent with other gold and silver bullion ETFs. At the same time, the Funds' industry-leading features will remain unchanged and unitholders will continue to benefit from the Funds' low administration fees, industry-leading bullion security and safeguards, and Canadian domiciled, tax-efficient structure. The Funds will continue to own the physical bullion they now own and there will be no immediate change to their holdings, subject to potential redemptions as further described in the Circulars.
Reasons to Vote FORthe ETF Conversions
ETFs are at the forefront of investment product innovation and have been the fastest growing segment of the investment fund industry in Canada and globally for over 10 years. ETFs have truly democratized investing and their strong growth has been due to their industry leading attributes: liquidity, transparency, easy access and low fees. The proposed ETF Conversions provide investors with the best possible investment solution available to obtain access to physical bullion exposure in an efficient and low cost manner. The ETF structure is simply the best way to obtain gold and silver bullion exposure in the marketplace today. The ETF Conversions offer multiple benefits to all unitholders including:
Expected elimination of material trading discounts to NAV and significantly enhanced liquidity;
Unitholders will gain immediate liquidity following unitholder approval of the ETF Conversions through the ability to redeem for cash at 100% of NAV until the ETF Conversion is completed;
Maintains the Funds' existing low administration fees;
Enhanced ability to grow Funds' assets and thus reduce expenses on a per unit basis as the units will be continuously offered;
Retains the Funds' industry-leading bullion security and safeguards;
With respect to Central GoldTrust, creates the only dual-listed (Canada and U.S.) physical bullion ETF;
No expected material adverse tax effect on the Funds or their Unitholders and preserves the Funds' tax efficient structures; and
Unitholders will benefit from Purpose's significant experience in ETF management and marketing at no additional cost.
"At Purpose, we remain committed to providing industry leading premier investment solutions that offer all investors the best possible experience and minimize their fees," said Som Seif, CEO at Purpose Investments. "Central GoldTrust and Silver Bullion Trust along with their administrators share the same values, and we feel confident that our proposed structure will enhance the low fee investment options for our clients."
Management Fees Reduction
Upon the Funds conversions into ETFs, Purpose has agreed to reduce each Fund's already low management fees by 25% until the reduction reaches an amount of up to $1,900,000 for Central GoldTrust and up to $100,000 for Silver Bullion Trust, which further reduces the Funds' already low fees, in an effort to compensate unitholders for the costs that Central GoldTrust and Silver Bullion Trust have incurred in defending unitholders' interests from Sprott Asset Management LP's ("Sprott") hostile take-over bid.
Each of Central GoldTrust and Silver Bullion Trust has called a special unitholder meeting to vote on the ETF Conversion proposal to be held on January 26th, 2016. In order to preserve the option to consider the ETF Conversion proposal which is unanimously supported by the independent board of trustees of each of the Funds, unitholders of each of the Funds will have to withdraw their tendered units before December 7, 2015, otherwise they may be denied the opportunity to consider the ETF Conversion.
Purpose's senior management team has extensive experience managing ETFs, closed-end funds and their conversion into ETFs. At Claymore Investments, Inc. ("Claymore"), Som Seif led the first conversion of a closed-end fund to an ETF in Canada and has a successful track record in founding and managing gold and silver bullion funds and converting bullion closed-end funds into ETFs, specifically the conversion of the Claymore Gold Bullion Fund into an ETF in February 2010.
Purpose is led by a seasoned management team with a proven track record of success in building and growing successful investment management businesses and soundly stewarding investors' capital. As the founder and CEO of Claymore, Som Seif led Claymore to become one of the most successful growth stories in the investment funds industry in Canada and the ETF industry globally. Subsequently, after Mr. Seif built Claymore from start-up to $8 billion in assets, it was successfully sold to BlackRock, Inc. in March 2012.
About Purpose Investments
Purpose Investments is an asset management firm inspired by the belief that all investors should have access to great investment products along with low fees. Purpose believes in focusing first on managing risk and creating value that is currently missing from the marketplace, thus empowering all investors to be better investors. Purpose has over $1.4 billion in assets under management and currently offers 14 exchange traded funds and mutual funds and four closed-end funds across multiple asset classes and both traditional and alternative investment strategies.
Purpose is the manager of NexC Partners Corp. (NXC), an investment corporation which invests in a portfolio of North American dividend-paying equity securities, plus owns an equity stake in Purpose.
Forward-looking Information
Certain statements in this news release may constitute "forward-looking information" within the meaning of applicable securities laws. Such information includes, but is not limited to, statements regarding the ETF Conversion. Words such as "will", "estimate" or "expect" and similar expressions (including grammatical variations thereof) are intended to identify such information. The forward-looking statements are not historical facts but reflect Purpose's current expectations regarding future results or events. The forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. These and other factors should be considered carefully and readers should not place undue reliance on the forward-looking statements. The forward-looking statements are made as of the date hereof and Purpose does not undertake to update any forward-looking statement that is contained herein, whether as a result of new information, future events or otherwise, unless required by applicable law.
