Interesting RSP offering

[mcfarms]

Charlie
Is this a good sign for our industry or is it the sign that things are getting toppy when "regular" folks are getting these offers.






Attention Business Editors:

Jovian Subsidiary Launches TD Agricultural Growth Notes
TORONTO, Sept. 24 /CNW/ - Jovian Capital Corporation ("Jovian") (JOV:
TSX) and its wholly-owned subsidiary JovFunds Management Inc. ("JovFunds"), in
conjunction with The Toronto-Dominion Bank are pleased to announce the launch
of the TD Agricultural Growth Notes, Series 1 (the "Notes"). The Notes
performance is linked to an underlying basket comprised of four agricultural
commodities; wheat, corn, soybeans, and livestock. The weightings of the
underlying Basket are 40% wheat, 10% corn, 25% soybean, and 25% S&P GSCI
Livestock Excess Return Index.
"Agricultural commodities have been receiving a lot of attention lately.
With increasing demand from a growing population, the search for alternatives
to oil, and the limited supply of land for growing crops and grazing livestock
- there is strong potential for this sector" said Raj Lala, Managing Partner
of JovFunds. "We are very pleased to offer these Notes as the first investment
product where JovFunds has partnered with TD Bank."
The Notes will offer investors unlimited potential return with 120%
participation in positive basket returns. The Notes are 100% principal
protected by The Toronto-Dominion Bank, if held to their maturity date in five
years. The Notes will be available for sale until November 1, 2007.
The Notes are 100% RSP eligible, and the minimum investment is
$5,000 CDN.
TD Agricultural Growth Note, Series 1 - FundSERV Code: TDN125

For more information about the Notes: Visit: www.jovfunds.com Email:
info@jovfunds.com Call: 1.866.514.6603

This press release is for information purposes only and does not
constitute an offer to sell or a solicitation to buy the Notes referred to
herein. Commissions, trailing commissions, management fees and expenses all
may be associated with an investment in the Notes. Please read the Information
Statement before investing. While a holder is entitled to the payment at
maturity which cannot be less then the principal amount of the Notes, the
Notes do not bear interest and there can be no assurance that the Notes will
show any return. It is thus possible that no return will be paid. The
Information Statement, which contains the complete information relating to the
Notes will be sent to any prospective investor prior to the closing date.

About The Toronto-Dominion Bank (www.td.com)

The Toronto-Dominion Bank and its subsidiaries are collectively known as
TD Bank Financial Group. TD Bank Financial Group serves more than 14 million
customers in four key businesses operating in a number of locations in key
financial centres around the globe: Canadian Personal and Commercial Banking,
including TD Canada Trust; Wealth Management, including TD Waterhouse and an
investment in TD Ameritrade; U.S. Personal and Commercial Banking through TD
Banknorth; and Wholesale Banking, including TD Securities. TD Bank Financial
Group also ranks among the world's leading on-line financial services firms,
with more than 4.5 million on-line customers.

About JovFunds Management Inc. (www.jovfunds.com)

JovFunds provides innovative investment solutions for Canadian investors
through the creation, management and distribution of high-quality investment
products. JovFunds oversees the management and distribution of a diverse range
of investment products and currently has more than $1.3 billion in client
assets.

About Jovian Capital Corporation (www.joviancapital.com)

Jovian is a publicly-traded company listed on the TSX (JOV). Jovian is a
management and holding company with interests in a variety of financial
service firms specializing in wealth(*) and asset(xx) management. The Jovian
group of companies operates as a national financial services organization with
approximately $14.5 billion of client assets ($5.4 billion in assets under
management and $9.1 billion in assets under administration).

<<
(*) Wealth management entities include MGI Securities Inc., MGI
Securities (USA) Inc. and Rice Financial Group Inc. (xx)Asset
management entities include BetaPro Management Inc., Horizons Funds
Inc., JovFunds Management Inc., JovFunds Inc., Leon Frazer &
Associates Inc. and T.E. Wealth. Financial corporate service entities
include Felcom Data Services Inc. and Services Felcom Data (Quebec)
Inc./Felcom Data Services (Quebec) Inc. The TSX Exchange does not
accept responsibility for the adequacy or accuracy of this release.

Please visit www.jovfunds.com
>>




For further information: Don Sangster, Investor Relations, Jovian
Capital Corporation, (416) 933-5744; or Raj Lala, Managing Partner, JovFunds
Management Inc. 1-866-601-2440; Additional information relating to Jovian is
available at www.sedar.com and www.joviancapital.com





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[melvill]

Interesting, mcfarms. Note that the only guarantee is that the return will not be less than 0% at the end of five years! I didn't notice whether each investment will be 100% committed to margin or options premiums. I have to wonder if a certain percentage will go to margins and the rest will be available to TD or it's partner to invest in other, less risky ventures - in effect a five-year operating loan for the two of them.

Anyone else know anything about this?

[charliep]

Lee

My experience with indexes would be as you suggest - only a small percentage invested in the fund (reflecting margin requirement) with the remainder invested in something safer (money market or equivalent). At least that is what I told on some of the stock index stuff.

Mcfarms - These have been around before but likely more public interest given the rally in the market. Would be actively managed so the cost side of the investment is likely to be high.

Interesting enough, R. J. O'Brien (futures company) was looking at a stock based mutual fund made up of a basket of blue chip agricultural processing/food company stocks (ADM, Coke, John Deere, etc). Don't think went anywhere but was an interesting concept.

[wilagro]

Another scheme where the farmers do all or most of the work and the agri-business/financial interest groups realize the profits (if any) and gamble that you (the stupid farmer), will continue to dance to their tune and produce the raw materials for processing and value-added exploitation.

While it maybe too late, farmer-owned processing ventures are the only way to beat or compete against this control of the agricultural business by the gamblers and the exploiters.

I would be very careful about investing in these so-called "growth funds" as you will get dribbles of return while the fund managers get the gravy.

Been there and done that...and got burned.

Beware of the crooks...they are hiding behind every tree.

[freewheat]

Wiagro said,
"While it maybe too late, farmer-owned processing ventures are the only way to beat or compete against this control of the agricultural business by the gamblers and the exploiters."

I agree farmer owned ventures would help. Do you agree the CWB should move aside and let farmers mill wheat and barley?

This is off topic of the rsp offering BTW!!!

[charliep]

Will note the product was not designed for farmers but rather investors (some of who are farmers). Products like this will add volatility to futures market but that isn't 100 % bad - volatility creates opportunities and risk.

Hate paying the 2 % fees myself on mutual funds but the opposite is the opportunity to do the investing yourself/lower your investment cost. Then you need a proper amount of time, knowledge, attitude, discipline and luck. Your alternative is various fixed interest investments.

[mcfarms]

I Ithought you and Lee would find it interesting. It reminds me a bit of the story I heard a financial guy on money talks the one Saturday and he said he knew the stock market was topping out when his cab driver was telling him about a great stock pick one morning.
Or is it easier to get out of long positions if you can get rsp investors to take the downside risk for you.

[charliep]

The assumption is this fund will always be long. Suspect the fund will take all kinds of positions (including the short side) with technical/other tools playing as much a role as anything else in driving trading positions. Hedge funds/others have been in the market for a long time - this seems to be the first publically offered product.

An interesting comment from the CWB side is this kind of activity increases trading volumes in wheat (note the high percentage) and increases their probability/should decrease cost of covering risk on the producer pricing options. The CWB issue has always been the volume of hedging they do relative to overall market volume.

Note the comment on the taxi cab driver - my highlight for a top is when all my city friends note the rally and start asking how to set up a futures account.

[melvill]

I agree with Charlie on the public knowledge of the ag commodities, especially wheat, rally. A week or so ago a soccer-dad showed me a big article in the National Post about how high wheat prices were. Imagine, the National Post actually cares about wheat other than it's a sensational story. This oil patch dad was wondering if he should invest. Of course, he, and thousands more like him, should invest - said with tongue firmly planted in cheek. Like Charlie said the higher the volatility and trading volume the greater the opportunity for farm managers and the CWB to take positions to manage price risk. Of course, for some farm managers, managing price risk means slamming the bin doors shut but it's high risk.

Here's a quote from Timothy Hayes regarding equity markets but it applies to commodities, too. "The market is least risky when all the bad news - no production problems anywhere - is out, leaving virtually unlimited room for positive surprises. The market is most risky when all the good news - production problems or potential production problems - is out leaving virtually unlimited room for disappointment."