Dominion Bond Rating Service confirmed its ratings of IGM Financial Inc., and says the trends remain stable.

“Despite the very competitive industry in Canada, especially with the large banks placing an emphasis on growing their wealth management and mutual fund operations, IGM maintained its strong leadership position in the Canadian mutual fund industry,” DBRS notes.

Assets under management grew to about $85 billion at March 2005, and core net income increased by 20% to $637 million in 2004, it says. “Redemptions continue to be an industry-wide concern, especially in the equity fund categories, but IGM has been coping quite well,” it says.

The rating agency reports that IGM’s Mackenzie Financial Corporation division reported industry-leading gross sales in 2004 of $6.8 billion, “reflecting the benefit of having a broad range of mutual funds and investment styles in its product offering”.

“The strategic focus of the company includes emphasizing the delivery of financial planning, extending the diversity and range of products offered, and growing the distribution network,” it adds, noting that in 2004 it purchased a 75% interest in Investment Planning Counsel Inc., increasing its scale of operation and adding to its distribution ability.

“Some industry players have reported lower sales results and face challenges, partly due to the poor recent performance of mutual funds, a limited product line, and the overall competitive nature of the industry,” DBRS concludes. “As these and other players look to strategic alternatives, it can be expected that IGM will continue to be a consolidator in the industry and achieve growth and additional scale through acquisitions in Canada.”