(November 9 – 09:35 ET) – The first signs of mutual fund cost unbundling are here. Today Mackenzie Financial Corp. announced the creation of three new classes of units for high net worth investors. The classes will be available in most of the mutual funds in the Cundill, Industrial, Ivy and Universal families.
The different classes offer lower management fees for investors who pay fees for advice in dealer programs that do not require the payment of sales charges or trailers. Those investors can get F class units, charging 1.0% per year for equity funds and 0.75% per year for fixed income funds – about half their usual rates.
The class I and O units are designed for high net worth investors and institutional investors. The minimum investment on class I units is $500,000; $1 million for class O units. They also receive lower fees, negotiable above $1 million.
By separating the costs of fund management and distribution Mackenzie is shaking up the fund industry which has typically embedded those costs.
This move will provide consumers with amore transparent product. And advisors will get greater control over the costs of distribution. For more on the progress toward unbundling check out the November issue of Investment Executive.
-IE Staff
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