Advisor Update - Summer 2009

What Do Venture Dollars Do

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Provide critical funding to Canada's small and medium sized enterprises ("SMEs"). These enterprises are both a critical source of innovation as well as key drivers of the country's overall economy:
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98% of business in Canada are considered SMEs and employ 48% of the country’slabour force
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SME accounted for over 50% of all jobs created in Canada in 2008

 



Covington Strategic Capital Fund
Focused Technology Venture Investing

Focused on investments in Canada's technology sector, the Fund continues to be one of the top performing LSIFs in Ontario (Covington New Millenium Fund is currently the top performing fund).




 

Manager Commentary
Investing in Canada's Rich Technology Sector

"With a return of over 11% since inception (as at May 31, 2009) we are pleased with the progress of the Fund to date, says Managing Director Phil Reddon. The Fund's exit history and resulting performance are more indicative of how we feel a typical, sector focused venture capital fund should perform."

More Details on Strategic Capital Fund




Covington Group of Funds
200 Front St W., Suite 3003
Toronto, ON M5K 3K2
Tel: 416-365-9155
1-866-244-4714
Fax: 416-365-9822
Email: info@covingtonfunds.com
www.covingtonfunds.com

2010 - The Last Year to Receive the Full 15% Provincial Tax Credit

2010 is the last year that LSIF investors will be able to receive a full 30% in tax credits (15% Federal and 15% Provincial). The ability to combine a tax credit valued up to $1,500 on a $5,000 investment (or $1,875 on a $7,500 investment) + an investment in an LSIF that has produced some of Canada's strongest returns (such as Covington Strategic Capital Fund) makes good investment sense. As of 2011 the Provincial tax credit will be reduced to 10%.

 

Covington Venture Fund - Capital Protected Series

Launched in December 2007, Covington Venture Fund - Capital Protected Series recently completed its fourth investment. The $850,000 investment in Fidelity Stainless Ltd. (an existing holding within Covington Fund II and Covington Venture Fund) was completed in June 2009.

More Details on Capital Protected Series

Investee Profiles


Canada's Leading Master Distributor


Fidelity Stainless has been one of Canada's leading distributors of industrial stainless steel and aluminum products for close to two decades.

Fund(s):
Covington Venture Fund - Capital Protected Series
Total Invested
(at cost):
$850,000
Location:
Mississauga, ON
Status:
Private


More Details on Canada's Leading Master Distributor


Wireless, Innovation, Everywhere


WireIE is an international wireless professional services company, specializing in the cradle-to-grave development of wireless networks. A provider of next generation transformation services to existing legacy networks; WireIE has the unique ability to bring wireless service to systems and remote locations previously inaccessible.

Fund(s): Covington Strategic Capital Fund
Total Invested
(at cost):		 $2.5 Million
Location: Richmond Hill, ON
Status: Private

More Details on WireIE

 

 
Venture Portfolios Built on Vision, Focus & Experience
Important information about Covington Funds are contained in their prospectus. Please obtain a prospectus from your financial advisor and read it carefully before investing. These investments may not be suitable for all investors. Some conditions apply. Commissions, trailing commissions, management fees and expenses all may be associated with these investment. Covington's Funds are not guaranteed, their value changes frequently and there can be no assurance that the full amount of your investment will be returned to you. Tax credits subject to certain conditions and units must be held for eight years in order to keep the tax credits. Inception date for Covington Venture Fund - Capital Protected Series VIII and IX is November 2008. Inception date for Covington Strategic Capital Fund is January 2003. Performance data does not take into account sales, redemption, distributions or optional charges or income taxes payable by any shareholder that would have reduced returns . The indicated rates of return are the historical annual compounded total returns including changes in share value and reinvestment of all dividends. Performance data for Covington Strategic Capital Fund as at June 30, 2009: 6 months: -2.86%, 1 Year: -5.88%, 3 Year: 11.82%, 5 Year : 7.16%, ITD: 6.53%. (Series II): 6 months: -2.17%, 1 Year: -5.45%, 3 Year: 12.10%, 5 year: 7.42%, ITD: 6.76%. Principal repayment is subject to venture portfolio performance and redemption proceeds of Capital Protected Series.