Closed-end funds invest in a pool of assets on behalf of a group of investors who share common investment objectives. Don't be surprised if that sounds like a mutual (or "open-end") fund. Closed-end funds are another form of investment fund. They differ from their open-end cousins primarily in the fact that they issue a fixed number of shares.

The shares of closed-end funds are typically listed and traded on a stock exchange. Their shares are purchased in the same way as shares in any other listed company. Your broker (discount or full-service) charges a commission just as they would for the purchase of any stock, but there are no front-end or back-end loads typical of conventional mutual funds.

Morgan Meighen's relationship to closed-end funds reaches back to 1928 with the creation of Third Canadian General Investment Trust Limited under the guidance of the Right Honourable Arthur Meighen, former Prime Minister of Canada. This fund is one of the oldest in North America. Canadian General Investments, Limited (CGI), our largest fund, was established in Ontario in 1930. Canadian World Fund Limited was established in 1994.

The shares of Morgan Meighen's three closed-end funds are traded on the Toronto Stock Exchange, with Canadian General Investments also being traded on the London Stock Exchange. U.S. investors can buy shares of these closed-end funds through their local brokers who can arrange trades on the TSX.

• Full Investment: Not subject to redemptions, closed-end funds typically are fully invested, in contrast to open-end funds which must keep a portion of their assets liquid in order to meet ongoing redemption requests. The result: more of your money is at work for you, and the fund has the opportunity to invest in more illiquid stocks and in special situations.
• Investment Income: Dividends, interest, and in some cases capital gains distributions may be paid to investors in the form of dividends, providing a source of investment income.
• Leverage: The shares of closed-end funds often trade at a discount to their corresponding Net Asset Value.
  • Investors benefit from the leverage provided by this discount since more assets are at work generating income than actually paid for.
  • Closed-end funds can borrow funds (eg. through issuance of preferred shares or borrowing) to leverage the portfolio and strive for superior long term returns.
• Low Management Fees: Excluding leverage costs, the MERs (management expense ratios) of the closed-end funds managed by Morgan Meighen are lower than the average open-end equity mutual fund MER.
• Registered Plan Eligibility: MMA's closed-end funds are eligible for RRSPs, RRIFs, LIRAs, LIFs and most other registered investment plans.
• DRIPs and SPPs in Canadian General Investments, Limited: Dividend Reinvestment Plans and Share Purchase Plans allow you to accumulate additional shares in the closed-end funds with no commissions or service fees (SPP not available to U.S. shareholders).