(October 11 – 14:30 ET) – Merrill Lynch Investment Managers Canada is consolidating its Atlas family of mutual funds into the Merrill Lynch Funds group. The move gives the group 27 funds and more than $4.2 billion in assets. Merrill Lynch acquired Atlas when it purchased Midland Walwyn in 1998.
The company says the consolidation gives clients several immediate benefits. Besides lower costs, clients will gain greater access to the global investment expertise of Merrill Lynch Investment Managers. As well investors will be able to purchase Merrill Lynch Funds through a broad base of 3rd party distributors – a first for Merrill Lynch Funds in North America.
“Merrill Lynch Investment Managers’ portfolio management strength made it easy for us to bring management of the Atlas Funds in-house,” said Ben MacInnis, president and CEO. “As a result of these changes, we expect to be able to reduce the Management Expense Ratios (MERs) for many of our funds by 5 to 10 basis points, depending on the type of fund.”
“The Canadian mutual fund industry has gone through some significant changes recently,” said MacInnis. “We are seeing sales concentrate among the leading brands at the expense of smaller firms. Clients are showing an increasing preference for well known companies with global reach, and Merrill Lynch is among the largest of the big brands. We want to take advantage of that company strength.”
The consolidation will result in the majority of existing Atlas funds being renamed Merrill Lynch Funds effective immediately. In most cases, the subadvisors are being replaced by in-house portfolio managers, effective the close of business November 24th, 2000.
Several external managers will be kept under the Merrill Lynch Funds banner, another first for Merrill Lynch Funds. Marvin & Palmer Associates, Jarislowky Fraser Limited and Global Value Investment Partners Pte. Ltd. will continue to manage Merrill Lynch Funds, under the Merrill Lynch “Select” banner.
The company is proposing the mergers of several of its funds. Under the proposal, the Atlas American Advantage Value Fund would merge into the Merrill Lynch U.S. Basic Value Fund. The Atlas Canadian Emerging Growth Fund and Atlas Canadian Small Cap Value Fund would merge into the Merrill Lynch Canadian Small Cap Fund (formerly the Atlas Canadian Small Cap Growth Fund). The Atlas Canadian Income and Growth Fund would merge into the Merrill Lynch Canadian Balanced Value Fund (formerly the Merrill Lynch Canadian Balanced Fund). The Atlas Latin American Value Fund, the Atlas Pacific Basin Value Fund would merge into the Merrill Lynch Developing Capital Markets Fund (formerly the Atlas International Emerging Markets Growth Fund). The Atlas World Bond Fund would merge into the Merrill Lynch Canadian Bond Fund (formerly the Atlas Canadian Bond Fund).
The company says unitholders of each terminating fund will exchange their securities for Class A units of the continuing fund on a dollar-for-dollar tax rollover basis. Meetings for unitholders to approve the mergers have been called for November 23. If approved, the mergers will take effect on or about December 15.
-IE Staff