Focus on Mutual Funds Special Report

Investment Executive regularly lists notable developments in Canada’s investment product landscape. Here’s the latest:

  • Picton Mahoney Asset Management launched the Picton Mahoney Fortified Alpha Alternative Fund on May 3. The ETF units started trading May 9 on the TSX (ticker: PFAA). The liquid alternative fund invests globally in long and short positions in stocks and fixed income securities, including distressed debt and floating rate loans. Other holdings could include special purpose acquisition companies, master limited partnerships, options, futures, forward contracts, swaps and commodity derivatives, Picton Mahoney said in the prospectus. It generally expects to use leverage of 2.5 to 3 times its net assets. The risk rating is low to medium while management fees are 1.95% for Class A, 0.95% for Classes F & FT and 0.95% for the ETF. The fund also has a performance fee of 20% above a 2% hurdle rate with a perpetual high-water mark.
  • Desjardins added 10 new funds and one portfolio to its SocieTerra product line, which excludes issuers that get a major portion of their revenue from the fossil fuel industry. The new products were rolled out between April 11 and May 30 (one isn’t available until June 21) and include a variety of Canadian, American and global bond, equity and balanced funds, as well as a fixed-income portfolio. The risk ratings range from low to medium and management fees range from 0.74% to 1.9%.

Fee Reductions

  • Capital International Asset Management (Canada) Inc., aka Capital Group, will reduce fees on all 10 of its mutual funds effective June 1. The fee reduction varies by fund, with the most significant drop — to 0.45% from 0.65% — applying to Series F of the Capital Group World Bond Fund (Canada). All funds will have three management fee tiers: on the first $5 billion in assets; another on assets of $5 billion to $10 billion; and the third on assets of more than $10 billion. This lets the firm pass economies of scale on to investors as the fund grows, Capital Group said in a press release.
  • Brandes Investment Partners & Co., which operates under the retail trade name Bridgehouse, has reduced fees on two of its equity funds: the Brandes Global Equity Fund (to 1.75% from 1.85% for Series A, and to 0.75% from 0.85% for Series F) and the Brandes U.S. Equity Fund (to 1.65% from 1.85% for Series A and to 0.65% from 0.85% for Series F). The new fees took effect May 24.

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