SOURCE: Purpose Investments Inc.

Purpose Investments Inc.

December 17, 2015 17:44 ET

Purpose Investments Announces Termination of Definitive Agreement With Central GoldTrust and Reaffirms ETF Conversion Proposal for Silver Bullion Trust

TORONTO, ON--(Marketwired - December 17, 2015) - Purpose Investments Inc. ("Purpose"), manager of the Purpose family of exchange traded funds ("ETFs") and mutual funds announces it has agreed with Central GoldTrust ("CGT") and Sprott Asset Management LP and certain of its affiliates to terminate the definitive agreement with CGT and Central Gold Managers Inc. dated November 26, 2015 in accordance with the permitted termination provisions of the definitive agreement. The termination relates solely to CGT, and the definitive agreement remains in full force and effect with respect to Silver Bullion Trust ("SBT") and the proposal to convert SBT into an ETF.

Purpose wants to reaffirm its commitment to the Silver Bullion Trust's ETF conversion proposal for which a Management Information Circular ("Circular") had been filed on December 4, 2015 for a unitholder meeting to be held on January 26, 2016 to consider and vote on the proposed conversion of the SBT into an ETF ("SBT ETF Conversion"). The Circular is available on the SBT's website and on SEDAR at Unitholders will also receive a paper copy of the Circular by mail, unless they have previously opted to not receive securityholder materials. The proposed SBT ETF Conversion has the unanimous support of Silver Bullion Trust's independent trustees and represents an exciting opportunity for unitholders of SBT.

Upon the successful completion of the SBT ETF Conversion, units of SBT are expected to trade in line with their underlying net asset value ("NAV"). The SBT ETF Conversion should eliminate any material future discounts to NAV and provide unitholders with significantly enhanced two-way liquidity, consistent with other silver bullion ETFs. At the same time, the SBT's industry-leading features will remain unchanged and unitholders will continue to benefit from SBT's low administration fees, industry-leading bullion security and safeguards, and Canadian domiciled, tax-efficient structure.

Reasons to Vote FOR the SBT ETF Conversion

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 SBT ETF Conversion provides investors with the best possible investment solution available to obtain access to physical silver bullion exposure in an efficient and low cost manner. The ETF Conversion offers multiple benefits to all unitholders including:

  1. Expected elimination of material trading discount to NAV and significantly enhanced liquidity;
  2. Unitholders will gain immediate liquidity following unitholder approval of the SBT ETF Conversion through the ability to redeem for cash at 100% of NAV until the SBT ETF Conversion is completed;
  3. Maintains SBT's existing low administration fees ;
  4. Enhanced ability to grow SBT's assets and thus reduce expenses on a per unit basis as the units will be continuously offered;
  5. Retains SBT's industry-leading bullion security and safeguards ;
  6. No expected material adverse tax effect on SBT or its Unitholders and preserves SBT's tax efficient structure; and
  7. 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. "Silver Bullion Trust and its administrator share the same values, and we feel confident that our proposed structure will further enhance the low fee investment options for our clients."

Management Fees Reduction

Upon the SBT conversion into an ETF, Purpose has agreed to reduce SBT's already low management fees by 25% until the accumulated reduction reaches an amount of up to $100,000.

Silver Bullion Trust has called a special unitholder meeting to vote on the SBT ETF Conversion proposal to be held on January 26th, 2016.

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 5 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.

Contact Information

  • For further information please contact:
    Dan Rubin
    Vice President, Marketing
    Purpose Investments Inc.
    Tel: (877) 789-1517