Target Click Funds
Taking the worry out of investing
The IA Clarington Target Click Funds are Canada's first guaranteed mutual funds. We designed them specifically to help you stay on track to meet your goals.
Here are some of the benefits of Target Click Funds.
You don't need to worry about losing your money.
The “click” in Target Click Funds comes at the end of each month. If the gains for that month are higher than any previous month, then that amount is locked in. When the Fund reaches maturity, you will receive whatever the highest month-end value was, no matter when you started to invest in the Fund.
Here’s an example.
* For illustrative purposes only.
Point A : This is the inception value, the point at which the Fund first began to invest.
Point B : The value of the Fund has actually dropped. But since the inception value (Point A) was higher, investors are guaranteed at least that amount when the Fund matures. Investors who purchase at this point will get a discount from the original value, but will still benefit from the guarantee.
Point C : The value of the Fund has increased, but that doesn’t count because it’s the middle of the month. Only month ends are captured.
Points D, E & F: These are all month ends and higher than the inception value.
When the Fund matures, each investor is guaranteed the highest month-end unit value ever achieved over the lifetime of the fund – in this case, point F. All investors will benefit, regardless of when they buy the fund.
Your investment is well diversified
Each IA Clarington Target Click Fund is made up of three components:
- Units of IA Clarington Global Equity Exposure Fund*
- Government of Canada strip bonds
- Cash investments
Together, these three components provide growth potential and downside protection and enable the Funds to meet their guarantees.
*IA Clarington Global Equity Exposure Fund is used exclusively for the IA Clarington Target Click Funds and is not available for purchase.
The IA Clarington Global Equity Exposure Fund provides exposure to the U.S., Europe & the Asia/Pacific region for balanced global holdings in the world's largest, most dynamic markets.
The fixed-income part of each Fund invests in strip bonds and cash for
- protection against equity market downturns
- decreased volatility.
The strip bond portion ensures that when a Fund matures, all investors, no matter when they bought the Fund, will receive the highest month-end unit value ever achieved over the lifetime of the fund.
Our parent company, Industrial Alliance Insurance and Financial Services Inc., the fourth-largest insurance company in Canada, provides further assurance that the guarantee will be met.
You can get your money when you need it
Just like a traditional mutual fund, investors in the IA Clarington Target Click Funds can redeem at any time (subject to applicable fees). If you redeem before a Fund matures, you will receive the current value of your units. Remember that the guarantee of the highest month-end value only applies when you hold the fund to the maturity date.
Your investments evolve to match your risk tolerance
As the date when you will need your money draws nearer, the investment approach of your Fund changes to decrease risk, shifting away from equities and more towards fixed income and cash investments.
Since this approach is less expensive to manage, the fees you pay (known as the “management expense ratio” or MER) also decrease.
Three different maturity dates to choose from
Choose the Fund that best matches your plans to use the money invested. That way, it will provide growth potential and protection from short-term market downturns when you most need it. Select the Target Click Fund that meets your investment time horizon.
|Target Click 2020||Medium-term investment horizon|
|Moderate to strong growth potential|
|Target Click 2025||Long-term investment horizon|
|Strong growth potential|
|Target Click 2030||Long-term investment horizon|
|Stronger growth potential|
Annual rebalancing to strengthen growth potential
IA Clarington Target Click Funds rebalance the cash and equity portions every February. This provides two potential benefits.
- If the equity portion has declined due to poor equity market performance, the cash is used to reinvest in the equity portion. That means the Fund is buying equities when prices are low.
- If the equity portion has grown because equity market performance is strong, some of the equities are sold and reinvested into the cash account. That means the Fund is selling equities when prices are high and locking in profits.
Overall, rebalancing increases the potential for higher month-end values.
A well-established investment
Target date funds were originally introduced in Europe in November 2000. IA Clarington introduced the Target Click Funds to Canadian investors in February 2005. Target date funds can also be found in Austria, Norway, Germany, The Netherlands, Hong Kong and Sweden.
A portion of the portfolio is always invested in strip bonds, which supports payment upon maturity of the Fund’s guaranteed amount. The amount invested in strip bonds depends on the number of years to maturity in each Fund. The closer to maturity, the greater the allocation to bonds. See disclosure for additional information about the Fund’s guaranteed amount at maturity.
The remaining portfolio is allocated to cash and a global equity mutual fund ("GEEF"). The GEEF obtains exposure to six global stock market indexes through an actively managed derivatives portfolio. Through the use of derivatives the portfolio manager seeks to enhance the monthly returns of each index. Therefore, if a Target Click Fund's stated allocation to equities is 30%, the return characteristics of the equity component are expected to behave as if the Fund had an effective exposure to equities greater than that.
Rebalancing occurs annually on the last business day in February. The Fund rebalances its cash and equity positions to equal amounts, selling equities in rising markets and buying them in falling markets.
Current guaranteed values + Premium / discount
The Target Click Funds can trade at a discount to their guaranteed value. The following table illustrates the level of discount or premium based on each Fund's current market value. The guaranteed value can rise over time.
|Target Click 2020*, Series A|
|Target Click 2025, Series A|
|Target Click 2030, Series A|
† The discount is the spread between the Fund's current market price (NAV) and the current guaranteed value at maturity expressed as a percentage. The discount value does not represent an expected compound rate of return.
*Effective July 1, 2015, the management fee for Series A of the Target Click 2020 Fund will be reduced from 2.10% to 1.65% and on Series F from 1.10% to 0.90%. The trailer fee on Series A assets will be reduced from 1.00% to 0.50% for front-end holdings, as well as any matured DSC or matured low load assets, and from 0.50% to 0.25% for on-schedule Low Load and DSC holdings.