(March 27 – 11:30 ET) – Online broker BayStreetDirect Inc. is launching a line of hedge funds.

BSD notes that hedge funds are becoming increasingly popular with Canadian retail investors, and it is adding them to its product lineup to provide its members greater access and flexibility to tailored investment strategies.

Hedge funds are usually sold as private placements to sophisticated investors in Canada. The minimum thresholds are the same as for regular private placements, typically $150,000 (in Ontario for example) or $97,000 in most provinces. The exception is British Columbia where the minimum is just $25,000.

BSD’s first offering is the Excalibur Harvest Canadian Fund. The fund is a premium-yield fixed income fund that owns: a core portfolio of short-term Canadian Goverment Treasury Bills and bonds; and a yield enhancement trading program that invests in put and call option credit spreads on the U.S. Treasury Bond Futures.

The fund’s objective is to increase investor principal every 12 to 14 months at double-digit rates; generate positive returns regardless of market direction; and earn high levels of capital appreciation with a maximum pre-determined risk level.

“We selected this fund as our first hedge fund offering as it employs a very low risk strategy and yet can still deliver double digit returns,” says BSD.