Advantageous investments

AMS fund subsidizes potential operating budget deficit, vice-president (operations) says

AMS Vice-President (Operations) Leslie Yun says the Advantage Fund promotes long-term financial sustainability.
AMS Vice-President (Operations) Leslie Yun says the Advantage Fund promotes long-term financial sustainability.

The AMS has an advantage when it comes to playing the investment market.

Their Advantage Fund, where they keep all investment profits and deficits, protects them from financial meltdown by giving them an opportunity to play with investments without risking their operating budget, AMS Vice-President (Operations) Leslie Yun said.

Yun said the AMS has a number of investments that generate revenue for their Advantage Fund.

The fund’s investment portfolio includes retail chains, telecommunications companies, National Canadian Banks, government bonds and U.S. and international companies.

The fund is managed by CIBC Wood Gundy and monitored by a sub committee of the AMS Board of Directors consisting of Yun, AMS Controller Scott Bell, an AMS service director and a board member, Yun said.

The Advantage Fund is tightly controlled and any spending from it is highly scrutinized, Yun said.

“It’s an opportunity to collect revenues for long-term financial sustainability,” she said. “We put a very special focus on it to ensure it’s not spent recklessly.”

The fund’s interest is used to subsidize the operating budget.

“We do allocate interest we expect to earn to the [AMS] Board of Directors for their operating budget,” Yun said, adding that there are exceptions such as in 2007 when the Advantage Fund helped assembly to fund the AMS’s sesquicentennial celebrations.

The fund was created in 1998 and had a $1,000 balance at the end of its first year, Yun said.

“Before the fund was created in the later 1990s, there was a lot of reluctance in the AMS to take advantage of investments because they didn’t want that to take away from the operating budget,” she said, adding that the Advantage Fund is completely separate from the operating budget so losses in the investment portfolio don’t translate into a budgetary decrease.

Yun said each year the AMS invests its cash flow into the Advantage Fund, meaning that contributions can change every year based on how much money the AMS has and how much goes toward its operating budget.

Last year the investments in the Advantage Fund ran a $115,352 deficit, Yun said.

“It was a complete function of the economy,” she said, adding that these losses were consistent with other investment portfolios across the country.

This year’s account projections are positive and the account should have $205,548 at the end of the year, Yun said.

In addition to the Advantage Fund, the AMS also holds other investments.

On Oct. 26, Canadian Universities Travel Service Limited (Travel CUTS) and all of its subsidiary brands became a part of Merit Travel Ventures Inc.

Prior to the merger, the Canadian Federation of Students-Services held 76 per cent of Travel CUTS and the Canadian Students Horizons Group (CSHG) owned 24 per cent of Travel CUTS, AMS President Michael Ceci said.

CSHG is made up of the student governments from the University of British Columbia, the University of Western Ontario, the University of Alberta and Queen’s University.

“In terms of what this will mean for the AMS going forward, that still needs to be determined by CSHG,” Ceci said, adding that the benefits for individual students are already clear.

“They [Merit] have more buying power so they’re able to get students better rates,” he said, adding that they’re currently trying to secure a student rate for WestJet airline.

The larger the market share of any given company and the more they buy, the cheaper it’s able to purchase products; the same way it’s cheaper for individuals to buy in bulk. Merit is able to get better deals and pass the savings on to students. “Confidentiality agreement precludes detailed information about how the merger was structured,” Ceci said. “The deal’s still in the process of being finalized.”

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