Frequently Asked Questions

1. Who is qualified to invest in the Fund?
The Fund is open to accredited investors. To qualify as an accredited investor one must satisfy any one of the requirements of the applicable securities legislation “Form Schedule A”, or make an investment of $150,000.

2. When can I invest in the Fund?
Purchases under the offering memorandum take place the first business day of the month.

3. Can I hold units in my RRSP or RRIF?
Yes. Provided you have a trustee that will work with Romspen. Most major financial institutions currently work with Romspen.

4. Will the fund pay a fixed interest rate?
No, but the Fund must distribute all of its income to unitholders annually. It is presently the intention of the trustees to do so by estimating the annual income and making regular monthly distributions of approximately 1/12th of such estimated annual income with periodic adjustments to correct for the actual results of the Fund.

5. Does the Fund have a target for its rate of return?
Neither Romspen, nor the trustees, intend to change their underwriting or other methods of assessing potential investments for the Fund. The trustees' objective is to achieve the same returns for investors as in the past. As outlined in the fund performance section, Romspen's mortgage portfolio over the past 10 years has been highly predictable year-to-year and has averaged about 10% per annum.

6. Will the interest rate fluctuate as new mortgages are added to or deleted from the Fund?
The Fund will earn the average rate of interest of all mortgages it holds, less expenses. As the average changes, so will the Fund's rate of return. As past performance of Romspen's overall mortgage portfolio illustrates, these fluctuations have been relatively small.

7. How will interest be paid?
Income distributions will be paid monthly on about the fifteenth day of the month.

8. How will the units be priced? Will the unit price fluctuate?
Initially, the units are priced at $10 each, so for example, $100,000 of mortgages are exchanged for 10,000 units of the Fund. In the future, the trustees will determine the fair market value per unit on a monthly basis by dividing the net assets of the Fund by the total number of units outstanding. In any given month, this fair market value will fluctuate modestly depending on the amount of interest accrued less expenses incurred and distributions to unitholders.

9. What is the minimum number of units that an investor may purchase?
Subject to compliance with applicable securities legislation, the minimum subscription is 5,000 units or $50,000.

10. Can I withdraw money from the Fund?
Subject to the limitations described in the Offering Memorandum, units may be redeemed on a monthly basis for their fair market value.  Redemption forms must be created by Investor Relations, and signed and initialed by the investor.  Redemption Forms are time stamped from date of receipt by investor relations.  The trustees of the Fund meet on the 14th of the month to determine eligible redemptions for the following month and have the right to limit redemption to 1% of the outstanding units of the Fund.  Special provisions may apply if the redemption queue exceeds 3%.

11. What costs are charged to the Fund?
There is an overall management fee of 1% calculated on Fund assets.

12. How will investing in the Fund affect my income taxes?
Distributions will be taxed the same as interest income.

13. How will I know how the Fund is performing?
The trustees report to investors on a quarterly basis similar to what a public company would provide to shareholders. This report will summarize the activities of the Fund as well as provide full financial statements. There will also be an annual report which will include audited financial statements and an annual investor meeting. Comprehensive and timely information is available on the website: www.romspen.com.

14. Who will answer investor questions on an ongoing basis?
Mr. Arthur Resnick, Ms. Ann Ralston and Ms. Mary Symonds are the primary contacts in the Investor Relations Department.


These frequently asked questions and answers are provided for explanatory purposes only. They are not intended to be a complete description of the Fund. For a complete description of the Fund, Please refer to the Offering Memorandum.