A long-term financial strategy

A long-term financial strategy

CRCD and the pandemic

The ongoing pandemic has resulted in increased stock market volatility and people are nervous. It’s reminding us all that unforeseen events can disrupt the markets and cause big swings in the value of investments. While the full extent of the financial impact of the virus remains unknown, the markets are already anticipating short- and medium-term consequences on the global economy.

We want to reassure shareholders that we have a long-term asset management strategy and are implementing support measures to help the businesses in our portfolio.

A long-terme strategy

We’ve had a strategy for managing financial assets based on a long-term vision for several years now. Our goal is to balance our mission of driving regional economic development with reasonable long-term returns for shareholders.

We have a comprehensive approach to managing our financial assets. We manage our portfolio of investments impacting the Quebec economy (SMEs, cooperatives and funds) jointly with our other investment portfolios.

This lets us balance our overall investment portfolio and limit the volatility of our share price caused by economic swings or negative developments that affect any of our partner businesses.

A few keys points about how we manage our assets:

  • The investment portfolio impacting the Quebec economy (55%) and our portfolio of other investments (43%) complement each other well.
  •  We have a large bond portfolio that represents more than 20% of our total assets. This should help limit losses during market fluctuations.
  • We have a selection of Canadian and global equity funds which should be less volatile than the markets.

Although projecting market outcomes isn’t always easy, we’ll continue following our long-term financial strategy to limit the consequences for our shareholders.

Reminder of redemption procedures for shares held for at least 7 years

If a shareholder wants to redeem their shares they can request the redemption from the caisse where their shares are held. They can ask to have them redeemed by mail or by email. Given the current situation, email and phone calls are preferred.

Remember that shareholders who redeem shares will no longer be able to claim a tax credit on subscriptions or exchanges for this issue (2020) or any subsequent issue.

Also, the redemption of a share implies the disposition of the share for tax purposes. Therefore, a capital gain or loss may occur. In short, a capital gain is taxable under normal tax rules, while a loss for tax purposes must be reduced by any tax credit already obtained. Shareholders don’t have to repay the tax credit they obtained for buying the shares.

Preventive measures

CRCD supports the preventive measures put forward by Desjardins to protect the health and safety of shareholders, employees and directors. Thus, in addition to the network of Desjardins caisses, CRCD continues to maintain all of its services intended for shareholders, but by asking shareholders to favor the telephone or email. Due to high call volumes, however, there may be a longer wait time than normal.

Support measures for businesses

We don’t yet know the full extent of the consequences of COVID-19 on the businesses in our portfolio, but we’re determined to help our partners keep their businesses going. Through our manager, Desjardins Capital, we offered relief measures to businesses susceptible to financial difficulties and those that may have been directly impacted by the pandemic.

CRCD shareholders are supporting local businesses and contributing to Quebec’s economic development.
Your support is making a real difference right now.

* Data as of December 31, 2019