Glossary

  1. Short-term financial wealth - represents low-yield and low-risk assets with a maturity, in general, of less than one year. It includes savings deposits, short-term paper, GICs and short-term investment funds.
  2. Savings and chequing deposits - are comprised of regular savings and chequing accounts (domestic and U.S.) and premium savings accounts. Premium savings accounts (PSAs) are made up of tiered savings accounts and high-interest savings accounts. Tiered savings accounts offer escalating interest rates tied to the account balance, with $5,000 typically required to earn a premium rate. High-interest savings accounts (HISAs) pay a high rate of interest from the first dollar deposited.
  3. Short-term paper - includes T-bills, commercial paper and bankers’ acceptances (BAs). These are comprised of short-term notes (under one year) issued by federal and provincial governments and corporations. These instruments are generally purchased at a discount to the issue value. The difference between the purchase price and the value of the note at maturity is the interest earned. Bankers’ acceptances and commercial paper trade on the secondary market. They are similar to T-bills, but o er a slightly higher yield and are often held in money-market funds to boost their yields. These are offered by non-financial corporations and, in the case of BAs, are guaranteed by a bank.
  4. Short-term investment funds - encompass Canadian, U.S. and international money-market funds. They include mutual funds, individual segregated funds and exchange-traded funds.
  5. Spread-based assets (deposits) - form the component of the financial wealth where the revenue stream for the issuer of the deposit, but not necessarily the distributor of the deposit, is derived from the interest differential between loans and deposits. The spread is the difference between the rates at which money is deposited in a financial institution and the higher rates at which the money is lent out. Spread-based assets include savings deposits, GICs, GIAs and market-linked GICs. Spread-based assets held within fee-based accounts or programs contribute to that category.
  6. Short-term instruments - include T-bills, commercial paper and bankers’ acceptances.
  7. Stand-alone investment funds - comprised of mutual funds, segregated funds, closed-end funds, hedge funds and insurance company group segregated funds that are not wrapped or repackaged into managed assets. Stand-alone investment funds are also net of segregated funds wrapping mutual funds and insurance company group segregated funds wrapping mutual funds. This category includes both short- and long-term funds.
  8. Separately managed wraps (SMW) - programs in which clients are able to select from a range of professional money managers to manage their portfolios; the discretionary authority resides with the program manager. The client continues to deal with his/her IIROC-registered investment advisor. These programs have minimum investment requirements starting in the $100,000 to $150,000 per manager range. The SMW category includes unified managed account (UMA) structures. Examples include the BMO Nesbitt Burns Advance and Architect programs and the RBC Dominion Securities A+ Program.
  9. Separately managed accounts (SMA) - include portfolios that provide fee-based professional management, yet allow the client to retain title to the individual securities. They are also referred to as “segregated” accounts because, unlike pooled funds, each client’s holdings are kept separate from those of others. Separately managed accounts typically require a minimum of $1 million, although some firms may go as low as $500,000.