Chorus II Portfolios

Tax Efficiency Simulation

To illustrate the tax efficiency of a Corporate Class portfolio, let's compare one here with an equivalent conventional portfolio.

Portfolio A

We'll take the Corporate Class Chorus II Growth Portfolio. After an initial investment of $300,000 at age 55, you invested $500 a month for 10 years.

Portfolio B

This will be a benchmark conventional portfolio. It has the same asset allocation and investment properties as Portfolio A, but it is not a corporate class portfolio.

	Portfolio
	A Chorus II	B Benchmark
Value at age 55	$300,000	$300,000
Monthly investment of $500	$60,000	$60,000
Return over 10 years	$269,107	$259,107
Income taxes payable on annual distributions	($15,798)	($47,291)
Value at age 65	$613,309	$572,256

Corporate class structure reduces annual taxable distributions and maximizes returns.

Calculation assumptions

Annual return of portfolios A and B

• 6,10%

Tax rates

• Interest : 45 %
• Dividends : 25 %
• Capital gains : 22,5 %

At retirement

Let's continue with our example. At 65, you opt for a portfolio with lower risk from which you draw steady income, calculated to extend capital longevity.

Portfolio A

This time, let's take the Corporate Class Chorus II Balanced Growth Portfolio.

Portfolio B

Once again, the benchmark portfolio matches Portfolio A except that it is not corporate class.

	Portfolio
	A Chorus II	B Benchmark
Value at age 65	$613,309	$572,526
Capital gains on deemed sale	$0	$21,047
Income taxes payable on this capital gain	$0	($4,736)
Net amount to transfer at age 65	$613,309	$567,790
Extended capital longevity income (5%)	$30 665	$28,390

You start retirement with a larger capital amount that gives you a more comfortable level of income at the same percentage.

Calculation assumptions

Annual return of portfolios A and B

• 5,60%