Listed below are frequently asked questions from Canadian investors. For further details, feel free to reach out to us.
How do I purchase units of BMG Funds?
Can I purchase units of BMG Funds without a broker or financial advisor?
Investors in Class D units enjoy lower management fees with the benefit of making their own investment decisions. There are no additional fees to switch to Class D from any other class of the same BMG Fund.
Please contact us at email@example.com or 1.888.474.1001 for further information.
What is the minimum I can invest in BMG Funds?
What are the fees associated with investing in BMG BullionFund, BMG Gold BullionFund or BMG Silver BullionFund?
Where can I obtain performance information?
How much time does it take to liquidate units?
Do BMG Funds qualify for RRSPs and other registered plans?
How do I transfer my RRSP into BMG Funds?
How do BMG Funds disburse the funds they receive from investors?
Why does BMG BullionFund hold all three metals instead of just gold?
Do BMG Funds invest in certificates or bullion derivatives?
What happens if gold, silver or platinum bullion is not available to match subscription proceeds for BMG BullionFund?
Why were BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund structured as open-end mutual fund trusts?
Do BMG BullionFund, BMG Gold BullionFund or BMG Silver BullionFund lease or lend their holdings?
Do BMG Funds hedge the Canadian dollar?
What's the difference between the various classes of BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund?
Do BMG Funds trade with a premium or discount to their Net Asset Value (NAV)?
What risk ranking are BMG Funds?
How is the Funds' valuation of portfolio assets established for BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund?
- the value of gold, silver and platinum bullion will be priced based on available spot prices;
- any cash and subscription receivables will be valued at their face value; and
- all assets of a Class of a BMG Funds carried in foreign currency will be translated into Canadian currency for valuation purposes as nearly as practicable using the best sources available to BMS and/or the applicable service provider, including its affiliates, on the Valuation Date on which the NAV of that Class of a BMG Fund is calculated.
There are already several precious metals mutual funds available in Canada. How are BMG Funds different?
There are many mutual funds with bullion or precious metals. What makes BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund different?
What can I expect as a return?
Are BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund fully invested at all times?
Where is BMG Funds' bullion stored?
What third-party confirmation is there that the bullion actually exists and is owned by BMG Funds?
In addition, as part of the annual audit, the Fund Managers auditor, RSM Canada LLP, physically counts the bars held on behalf of BMG Funds in the Custodian’s vault facilities, and confirms the bullion holdings for the annual financial statements.
*”Insured basis” refers to certain insurance covering the storage of the physical bullion with the BMG Funds’ Custodian, and does not refer to insurance related to a loss in market value of the underlying holdings.
Isn't it cheaper to purchase physical bullion and store it in my safe at home, or in a safety deposit box?
Are BMG Funds fees competitive?
What are the risks associated with investing in BMG Funds?
As a result, the following risk factors are associated with investing in the Funds:
Precious Metals Risk The prices for gold, silver and platinum bullion are affected by a variety of factors, including changing supply and demand relationships and international political and economic events. In addition, governments may intervene from time to time, directly and by regulation, in certain markets such as precious metals. These factors will indirectly affect the prices for gold, silver and platinum bullion. Direct purchases of gold, silver and platinum bullion may generate higher transaction and custody costs than other types of investments.
Availability of Precious Metals Risk It is possible that BMG BullionFund may not be able to buy gold, silver or platinum bullion from time to time. In such a situation, BMG BullionFund will continue to purchase those metals that are available, but will not be able to achieve its investment objective of holding equal amounts of all three precious metals until all three metals become available again.
Foreign Currency Risk Gold, silver and platinum bullion are usually traded in US dollars and, as a result, BMG Funds are vulnerable to foreign currency risk, which is the risk that the value of the Canadian dollar will increase as measured against a foreign currency. For example, a precious metal traded in US dollars will fall in value, in Canadian dollar terms, if the Canadian dollar increases in value relative to the US dollar, even though there is no change to the US dollar value of the precious metal. Conversely, if the Canadian dollar falls in value relative to the US dollar, there is a corresponding gain in the value of the precious metal measured in Canadian dollars attributable solely to the change in the exchange rate. BMG Funds do not intend to hedge their foreign currency exposure.
Non-Hedging Strategy Risk BMG Funds will not invest in derivatives to protect against decreases in the value of gold, silver or platinum bullion.
Specialization Risk BMG BullionFund will hold only gold, silver and platinum bullion, while BMG Gold BullionFund will hold only gold and BMG Silver BullionFund will hold only silver. As a result, investors should allocate only a percentage of their portfolio to BMG Funds in order to maintain an appropriate level of diversification.
Management Risk BMG Management Services Inc. is not registered as a portfolio manager, and for this reason BMG Funds have fixed investment policies.
Uninsured Losses Risk RBC Investor Services Trust, as Custodian, holds physical custody of the gold, silver and platinum bullion assets of BMG Funds on an allocated and *insured basis. The Custodian is obliged to maintain insurance satisfactory to BMG Funds against all risk except the risk of war, nuclear incident or government confiscation. *”Insured basis” refers to certain insurance covering the storage of the physical bullion with the BMG Funds’ Custodian, and does not refer to insurance related to a loss in market value of the underlying holdings.
Tax Risk It is anticipated that, for the purpose of computing its income under the Income Tax Act (Canada), each Fund will generally treat gains (or losses) as a result of dispositions of physical gold, silver and platinum bullion, as applicable, as capital gains (or capital losses), although depending on the circumstances, they may instead include (or deduct) the full amount of such gains in computing their income. If any transactions of a Fund are reported by it on capital account but are subsequently determined by the Canada Revenue Agency to be on income account, there may be an increase in the net income of that Fund for tax purposes and the taxable component of redemption proceeds (or any other amounts) distributed to unitholders, with the result that Canadian-resident unitholders could be reassessed by the Canada Revenue Agency to increase their taxable income by the amount of such increase, and non-resident unitholders potentially could be assessed directly by the Canada Revenue Agency for Canadian withholding tax on the amount of net gains on such transactions that were treated by the Canada Revenue Agency as having been distributed to them. The Canada Revenue Agency can assess a Fund for its failure to withhold tax on distributions made by it to non-resident unitholders who are subject to withholding tax, and typically would do so rather than assessing the non-resident unitholders directly. Accordingly, any such re-determination by the Canada Revenue Agency may result in the Funds being liable for unremitted withholding taxes on prior distributions made to unitholders who were not resident in Canada for the purposes of the Income Tax Act (Canada) at the time of the distribution. As the Funds may not be able to recover such withholding taxes from the non-resident unitholders whose units were redeemed, payment of any such amounts by the Funds would reduce the Net Asset Value of the units of the Funds.
Sometimes BMG Funds don't move in line with precious metals' prices. Can you explain this?
Is BMG Funds' bullion secure from any third-party claims?
Yes. As mutual fund trusts, BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund are separate legal entities whose assets are separate and distinct from BMG Management Services Inc., BMG Funds’ Manager and Trustee, are separate and distinct from the assets of BMO), the Custodian for all Funds. As a result of these arrangements, BMG Funds’ bullion is secure from third-party claims and held solely for the benefit of BMG Funds’ unitholders. BMG Funds’ bullion holdings cannot be co-mingled with holdings of BMO, or holdings of anyone else. BMG Funds’ assets are not subject to seizure by creditors of either BMO or of BMG Management Services Inc.
Who has control of BMG Funds' cash?
RBC Investor & Treasury Services (RBC I&TS) is the Custodian for BMG Funds cash assets and has been providing back-office services since 2004.
What assurance is there that BMG Funds' cash holdings are not fraudulently misappropriated?
The Administrator of BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund is RBC Investor & Treasury Services (RBC I&TS), a division of the Royal Bank of Canada. RBC I&TS administers in excess of US$2 trillion on behalf of mutual funds and hedge funds on a global basis. It is responsible for all BMG Funds’ accounting, calculation of the Net Asset Value (NAV), NAV per unit and the unitholders register. In addition, RBC I&TS is the custodian/administrator of BMG Funds’ bank accounts, and is responsible for BMG Funds’ banking, record-keeping, daily valuation and processing of all purchases and redemptions. Only RBC I&TS has signing authority on the BMG Funds’ accounts.
Are BMG Funds protected in the event of insolvency?
Who is the Canadian Investor Protection Fund (CIPF)?
What would happen if the Manager, Trustee or Custodian declared bankruptcy?
What protections are in place to prevent fraud and misappropriations of BMG Funds' assets?
There are stringent procedures in place to prevent fraud and any possible misappropriations of the assets of BMG BullionFund, BMG Gold BullionFund and BMG Silver BullionFund:
Custodian Bank of Montreal (BMO), Toronto, Ontario for the physical bullion assets. RBC IS Toronto, Ontario for the BMG Funds’ non-bullion assets (cash).
Registrar BMG Management Services Inc., Markham, Ontario is the Registrar, Trustee and Fund Manager for BMG Funds.
Administrator RBC Investor & Treasury Services (RBC I&TS), Toronto, Ontario the Administrator provides administration services to BMG Funds.
Auditor RSM Canada LLP, Toronto, Ontario, examines and approves the annual financial statements of BMG Funds, and expresses an opinion thereon. The auditor also performs a physical count of the bullion held in each Fund on an annual basis.
Independent Review Committee The Independent Review Committee (IRC), of BMG Funds provides independent oversight and impartial judgment on conflicts of interest involving each respective Fund. Among other matters, the IRC prepares, at least annually, a report of its activities for investors in each Fund that is, or will be, available on our website at https://bmgfunds.com/bmg-mutual-funds/ or upon request by any investor, at no cost, by calling: 905.474.1001 or toll-free at 1.888.474.1001, or e-mailing: firstname.lastname@example.org. The IRC is currently comprised of three members, each of whom is independent of BMG Management Services Inc., its affiliates and BMG Funds. Additional information about the IRC, including the names of its members, and governance of each Fund, is available in the Simplified Prospectus of the BMG Funds. In addition, the auditors of BMG Funds may not be changed without the approval of it’s Fund Manager in conjunction with the IRC in accordance with National Instrument 81-107 Independent Review Committee for Investment Funds. A written notice describing the change in auditors is sent to unitholders at least 60 days before the effective date of the change.
How do I know that BMG Group Inc. secures socially responsible precious metals?
What is the ‘LBMA’?
What is ‘Responsible Gold Guidance'?
How is gold superior to currencies or other liquid investments from an environmental, social and governance point of view?
Why do we still value precious metals?
What is meant by the term ‘honest money’?
Have further questions?
Contact us or call us at 1 888-474-1001 (toll free) or 905-474-1001. BMG representatives are available to speak to you from 8:00am to 6:00pm EST, Monday to Friday.