(June 2 – 15:50 ET) – Fidelity Investments Canada Limited says it will adopt the Toronto Stock Exchange 300 capped index as a benchmark for three of its Canadian equity funds.

Unlike the TSE 300 composite index, the most widely used benchmark for Canadian equity funds, the capped index places a 10% limit on the weighting for any one company. By contrast, Nortel Networks currently represents 27% of the TSE 300 composite.

“This decision reflects the fact that the TSE 300 is no longer an investible index,” said Stephanie Nacawa, vice president of research and development. “Not only are we prevented by securities regulations from having holdings that would replicate the current level of concentration of the TSE 300 index, we also don’t believe that doing so is in the best interests of our unitholders. Diversification is fundamental to responsible investing, and the TSE 300 capped index is more reflective of the diversification unitholders expect of our portfolios.”

Fidelity Capital Builder Fund, Fidelity True North Fund, and Fidelity Disciplined Equity Fund will each use the TSE 300 Capped Index as a benchmark.

In addition, Fidelity Disciplined Equity Fund has changed its investment strategy by switching the index it uses to determine its target weighting in various sectors to the TSE 300 capped index. The objective of the fund — long-term growth through investment in Canadian equities — remains unchanged.
-IE Staff