Excel Funds Management Inc.

Excel Funds Management Inc.

January 02, 2007 00:21 ET

Excel Funds Launches New Global Income and Growth Fund

TORONTO, ONTARIO--(Marketwire - Jan. 2, 2007) –

Attention Business Editors:

In the Autumn of 2006, Canadian investors were given a great deal of motivation to look for alternatives to heralded income trusts. While the finance minister's decision to change the tax treatment of income trusts was not taken very well, there was a silver lining; it has forced investors to look elsewhere and to diversify. The bonus is that the timing is great. There is a world of opportunity out there, and it now comes at a reduced risk.

Excel Income and Growth Fund, a new mutual fund solution, being launched January 2, 2007, will seek to provide investors access to investment in some of the world's best kept secrets in income paying equity and debt securities.

For example, "India's 364-day T-bills are yielding just over 7%, and the debt risk in India is low," says Bhim Asdhir, President and CEO, Excel Funds. India's equity and debt markets have undergone a massive re-rating over the last 7 years, as has India's financial security. "It is a less known fact that India is now America's fourth largest creditor, having some $160-billion in foreign exchange reserves," says Asdhir.

The fund will also look to invest in other places like Australia, Singapore and Germany. In Australia, for instance, take Macquarie Infrastructure Group; it is among the world's largest owners and developers of toll roads. It also has a current yield of over 6.0% and built in purchasing power growth. Macquarie also happens to own 30% of Canada's 407 ETR.

In Singapore, the fund will seek to invest in REITs (Real Estate Income Trusts) that invest in property in Singapore, India and China. These not only pay a decent yield, but they offer investors access to Asia's teeming real estate markets.

In Germany, real property managers, such as Deutsche Wohnen, a spin-off of Deutsche Bank, will have the chance to restructure their assets into REITs next year when laws preventing this are repealed. Real property values in Germany are experiencing a strong turnaround as more people seek home-ownership.

So what are the risks? Perhaps currency risk is the most significant risk to any global investing strategy that investors should consider.

Besides providing investors with geographical diversification, and non-North American currency exposure, Excel Income and Growth Fund will also show a low correlation to India, China and North American equity markets, as well as Excel Funds' other funds.

"Investors should ideally seek low correlating assets with good growth and/or income characteristics, when constructing their portfolios," says Asdhir. "It smoothes out the ride."

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