By Staff | December 12, 2005 | Last updated on December 12, 2005
12 min read

(December 16, 2005) Arrow Hedge Partners says the new Arrow Japan Long/Short Fund is now available for purchase. The equity hedge fund uses a long/short strategy, focused on generating absolute returns by investing in Japanese stocks.

The portfolio is relatively concentrated, with 70 to 90 positions held at any one time, Arrow says.

“We believe that investors who have exposure to Japan with a fund that can actively manage market fluctuations should benefit over the next few years,” says Arrow managing director Mark Purdy.

The fund’s advisor is London-based Invicta Investment Management, which has a research office in Tokyo.

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Net worth reaches $135,500 per capita

(December 16, 2005) Canada’s national net worth stood at $4.4 trillion at the end of the third quarter, or $135,500 per capita, according to Statistics Canada.

That’s up just 0.7% from the previous quarter. Gains in net worth had averaged 1.5% over the past 10 quarters.

The strong performance of the economy in the third quarter was reflected in the continuing advance in non-financial assets, such as real estate, the agency said.

Household net worth gained 2.3%, thanks to gains in the value of stocks, however the personal savings rate stayed in negative territory for the third consecutive quarter. Canadian households carry about $1.08 in debt for every dollar of disposable income.

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Ontario regulator names new commissioner

(December 16, 2005) The Ontario Securities Commission has appointed Patrick Lesage, Q.C., to a three-year term as commissioner.

LeSage’s lengthy legal career includes a term as Associate Chief Judge of the County and District Court and Chief Justice of what is now the Superior Court of Justice for Ontario.

In 2002, he became a senior resident at Massey College, University of Toronto. LeSage joined Gowling Lafleur Henderson as counsel in 2004, providing advice on a range of litigation, arbitration and mediation issues.

“During his distinguished 28-year career on the bench, Patrick LeSage presided over some of Canada’s most publicized and complex cases,” said OSC chair David Wilson. “Our vice-chairs and commissioners welcome this appointment and look forward to benefiting from Commissioner LeSage’s experience in complex legal and policy matters.”

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Former mining director hit with five-year ban

(December 16, 2005) A former director of a Vancouver-based mining company has agreed to pay the British Columbia Securities Commission $25,000 and serve a five-year securities market ban after admitting to breaching a cease-trade order.

Paula Marie Poe was the head of China Diamond, a TSX Venture Exchange-listed company. She admitted to trading securities in the company through a nominee account at First Associates Investments while she was under a cease trade order. Over one million shares of China Diamond were sold through the account.

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Ontario bumps up savings bond interest rate

(December 16, 2005) The interest rate for Ontario’s variable rate savings bonds is rising to 3.1% from 2.35%.

The rate, which is adjusted every six months based on market conditions, applies to variable-rate bonds purchased from 1999 to 2005.

There is no change to rates for the province’s fixed-rate and step-up savings bonds.

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Great West Life & Annuity president to step down

(December 16, 2005) Great-West Life & Annuity Insurance, a subsidiary of Great-West Lifeco, has announced the retirement of company president William McCallum, effective December 31. McCallum spent 41 years with Great-West.

Raymond McFeetors, who heads the parent company, will also lead Great-West Life & Annuity, starting in January.

The company made two other senior management changes. William Acton is promoted to president of the company’s Europe office while Denis Devos is appointed chief operating officer, Canada.

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High gold prices curbing demand

(December 15, 2005) The soaring price of gold has eroded the precious metal’s traditional support base in the jewellery market, according to a Scotiabank report.

“The rapid increase in price has forced physical buyers to the sidelines in India, China and the Middle East,” says Bernard Hunter, Director, ScotiaMocatta. “The lack of actual jewellery demand in these countries is slowly squeezing jewellery manufacturers and retailers to the point where some manufacturers are considering closing down parts of their operations in a bid to save costs.”

There’s also weaker demand for gold jewellery in the Western world, the report notes, although the Japanese market remains strong.

According to the report, it is not uncommon to expect a decrease in gold demand in response to higher prices as consumer buying power is eroded. However, the past quarter has also seen a drop in the US dollar equivalent of purchases.

The rising popularity of gold exchange traded funds, which have increased their assets by $5 billion US over the last 18 months, have also affected the gold market, the report notes. “These funds, which are backed by physical gold holdings, are an important new source of demand that have removed over 320 tons of gold from the market to date.”

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Sentry Select raising service fees to dealers

(December 15, 2005) Sentry Select Capital is increasing the annual service fee that the firm pays to dealers for Series A units of the Sentry Select Focused 50 Income Fund from 0.50% to 1.25%.

The fee will be calculated and paid quarterly to each dealer at the rate of one-quarter of 1.25% of the average value of Series A units held in the fund by the dealer’s clients during each complete calendar quarter.

The fee reflects service given by dealers and will not affect investors. Sentry Select will make a one-time payment to dealers to make the change retroactive to October 1, 2005.

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ScotiaMcLeod replaces portfolio advisor

(December 15, 2005) ScotiaMcLeod has named Connor, Clark & Lunn Investment Management as the new portfolio advisor for the Pinnacle Strategic Balanced Fund.

Connor, Clark & Lunn, established in 1982, will replace KBSH Capital Management, effective January 16, 2006.

“With more than $20 billion in assets under management, they were selected for the strength of their investment philosophy and process when it comes to fixed income and equity mandates,” ScotiaMcleod said in a statement.

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Former Dundee trader fined $30,000

(December 15, 2005) Canada’s stock market regulator, RS, has fined Ian Douglas, a former trader with Dundee Securities, $30,000 plus costs. RS says Douglas “demonstrated a pattern of order entry in the pre-opening on the TSX that breached the just and equitable principles of trade.”

Between July and December 2003, Douglas entered anonymous non-client orders on both sides of the market, which had the potential of trading against each other, RS explained. Between 9:28 a.m. and the opening of the market, Douglas would usually cancel or change one of the orders and then receive a fill for the remaining order. In some cases, he cancelled both orders.

“This manner of order entry is harmful to the integrity of the market,” said RS vice president Maureen Jensen. “He did it to avoid the TSX trading mechanism that allocates which orders will receive a complete fill at the opening of trading. The mechanism is also designed to prevent market professionals from ‘scooping’ the opening by entering an order just before the start of trading and receiving a disproportionate amount of stock.”

Douglas is the fourth Dundee employee to be disciplined for similar trading offences. Ricardo Mashregi was fined $60,000, while Mark Ellis and Keith Leonard, who were responsible for supervising Dundee’s traders, were each fined $21,000.

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MDS Capital to sell off labour funds

(December 14, 2005) MDS Capital has reached an agreement to sell three labour-sponsored funds as the company concentrates on the institutional sector.

Impax Capital is purchasing Canadian Venture Capital Management Corporation, which owns Medical Innovations Management, operator of the B.C. Medical Innovations Fund; and Medical Discovery Management, which runs Canadian Medical Discoveries Fund and Canadian Medical Discoveries Fund II.

The sale of its public retail funds is the first step in MDS Capital’s restructuring under new chief executive officer Peter van der Velden, whose goal is to refocus MDS on venture capital investing for institutional investors in the health care sector, the company said in a release.

When the deal is completed next year, Impax will be the sole shareholder of Medical Discovery Management and will indirectly own 100% of Medical Innovations Management. The two companies will continue to manage their respective funds.

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Equinox advisors to use PlanPlus software

(December 14, 2005) Equinox Financial Services has introduced a new online financial tool for more than 3,500 insurance advisors on the Equinox network.

Equinox Needs Analysis, a web-based tool, is part of the PlanPlus Web Advisor platform. The software integrates directly with life insurance comparisons from AIG, Manulife Financial, Standard Life and RBC Insurance.

“Equinox Needs Analysis is a great addition to the services we deliver to our network of independent MGAs and advisors,” says Daniel Dessureault, general manager, Equinox. “We firmly believe in the value of an unbiased, user-friendly needs analysis to assist advisors in helping their clients, and the link to our product comparisons will help advisors match a need to a recommendation.”

To complement the rollout of the new tool, Equinox will work with PlanPlus to deliver special webcast training sessions in both French and English for their advisors.

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S&P set to add trusts

(December 14, 2005) Standard & Poor’s will add 72 income trusts to the S&P/TSX Composite Index after the markets close on Friday.

Earlier this year, S&P announced a phased-in plan to incorporate trusts on the TSX. Initially, the trusts will be included at 50% of their market cap, and will be completely phased-in by March 2006.

Three stocks — Ivanhoe Energy, Catalyst Paper and ShawCor — were removed from the broad-based index. S&P also announced changes to its income trust index, adding 16 trusts and deleting 14.

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Fed raises key lending rate

(December 13, 2005) The U.S. Federal Reserve has bumped up its key overnight lending rate to 4.25%. It’s the 13th consecutive time the Fed has boosted rates since last summer, when the target rate stood at a historic low of 1%.

The quarter-point increase came as no surprise, however the Fed did change the language in its statement to suggest that the current cycle of tightening may soon come to an end.

“The committee judges that some further measured policy firming is likely to be needed to keep the risks to the attainment of both sustainable economic growth and price stability roughly in balance,” the Fed Open Market Committee said in its statement. “Core inflation has stayed relatively low in recent months and longer-term inflation expectations remain contained.”

Analysts interpret that to mean rates are high enough to support economic growth. Still, most expect a further increase in January.

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Energy trusts post strong returns

(December 13, 2005) Canadian energy trusts returned a median 27.5% in the third quarter, 22 percentage points higher than Q2, according to a report released today. Iradesso Communications notes that all of the 34 trusts analyzed produced positive returns in Q3.

Topping the list was Fairborne Energy Trust, which rose an impressive 74.3%. Trilogy Energy Trust rose 59% and Harvest Energy Trust was up 44%.

Of the 121 junior oil and gas companies and trusts included in Iradesso’s quarterly report, more than 97% produced positive returns for investors between July and September.

“The kind of investment returns realized in the third quarter cannot last,” says Iradesso president Peter Knapp says. “In fact, stock prices have pulled back in the past two months, potentially to cycle forward again sometime soon.”

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Calgary rep fined by IDA

(December 13, 2005) The IDA has imposed a $10,000 fine on Michael De Long, formerly of Canaccord Capital in Calgary, for forging a signature on a client transfer form.

An IDA panel called De Long’s conduct a “less egregious” instance of forgery. “The act of forgery here was committed out of frustration with the intent of assisting the client and with no thought of unjust enrichment or financial benefit to the De Long,” the panel said.

De Long has no disciplinary history, has operated under close supervision for the past 18 months at his current firm and has suffered a financial setback of approximately $80,000 of lost revenue as a result of his actions, the IDA noted. He must also pay $3,500 in costs and rewrite the Conduct and Practices Handbook exam.

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MFDA appoints board members

(December 13, 2005) The MFDA has appointed six members to its board of directors.

At its annual general meeting last Friday, the MFDA named George Aguiar of GP Capital, Ed Legzdins of BMO Mutual Funds and Kevin Regan of Investors Group as industry directors. They will serve two-year terms.

Ruth Grant of Toronto’s Hospital for Sick Children, corporate director Janet Pau and Robert Wright of Teck Cominco will serve three-year terms as public directors. Wright will also chair the 13-member board.

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BMO launches new GIC family

(December 13, 2005) BMO has introduced a new family of GICs designed to take advantage of rising interest rates. The RateOptimizer GICs combine interest rate maximization and protection from risk, the bank says.

The GICs use an advanced laddering strategy, in which investors earn an immediate five-year interest rate. Each year, when the term is renewed, 20% of the investment’s blended interest rate is updated by factoring in the current five-year renewal rate.

“Investors now automatically benefit in a rising interest rate environment,” BMO says.

“The new BMO RateOptimizer GIC is an all-in-one solution — ideal for a long-term, security conscious investor who wants stability, security and performance,” adds Julie Sheen, vice-president, BMO Term Investments.

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Counsel names new sub-advisors

(December 13, 2005) The Counsel Group of Funds has added Dreman Value Management and IPC Portfolio Management as sub-advisors to the Councel Select America Fund.

Starting in January, the two firms will manage a portion of the fund’s assets alongside the existing sub-advisor, Marsico Capital Management.

Dreman and IPC replace Pacific Financial Research.

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CI bows out of Clarington battle

(December 12, 2005) CI Financial has announced it is no longer interested in acquiring Clarington Corp., leaving Industrial Alliance as the sole bidder for the smaller fundco.

CI initiated the bidding war when the firm made an unsolicited offer of $13 a share on October 31. Clarington management sought a competing suitor and found one in Industrial Alliance. A war of words ensued, with CI accusing the Clarington board of favouring its shareholders interests over its fund unit holders.

CI declared its offer served the fund holders’ interest, since they would enjoy lower fees upon the integration of Clarington’s holdings into similar CI offerings. Industrial Alliance’s winning bid was for $15 per share.

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Mackenzie launches private client wrap program

December 12, 2005) The Mackenzie Financial Private Client Program today launched its new Open Architecture Service (OAS) wrap program for advisors and high net worth clients.

Compared to the company’s Portfolio Architecture Service (PAS) where Mackenzie provides advice and develops the client’s entire portfolio on the advisor’s behalf, the OAS allows advisors to take responsibility for constructing portfolios using Mackenzie products while the company handles all back-end administrative support. The program offers consolidated family reporting, including personal rates of return on different family accounts, fee calculation, monitoring and rebalancing based on advisor set criteria and trigger points, as well as tax and estate planning support.

Minimum investment is $500,000 across all household or family accounts.

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TDAM terminates exchange traded funds

(December 12, 2005) Citing lack of investor interest and low trading volumes, TD Asset Management today announced plans to terminate and liquidate TD Exchange-Traded Funds including the TD S&P/TSX Composite Index Fund, and Capped Composite Index Fund, the TD Select Canadian Growth Index Fund and the TD Select Canadian Value Index Fund.

The company will stop accepting subscription orders for new units of the funds on December 13. Redemption orders for baskets of shares and for cash will be processed until the termination date on or about March 13, 2006. Outstanding units of the funds will continue to be listed and posted for trading on the TSX. Investors may continue to purchase or sell units on the TSX through brokers and until markets close on the termination date in March.

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Templeton launches global income fund

(December 12, 2005) Franklin Templeton Investments has launched the Templeton Global Income Fund, a conservative global bond and equity fund. The fund is aimed at investors willing to accept a moderate level of investment risk and hold the fund for at least one to five years in exchange for regular income distributions and the potential for capital gains from global companies.

The fund invests in corporate, agency and government debt securities in developed and emerging markets, as well as stocks that offer or could offer attractive dividend yields.

Advisor commissions are 0-6% negotiable with the client on front end sales or 5% and 2% paid by the company for deferred and low-load sales respectively. Trailing commissions are 1% on front and low load units or 0.50% for units sold on a deferred sales charge (DSC) basis. DSC redemption fees range between 6% in the first year and 3% in year six. Minimum investment is $500.

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Altamira announces estimated fund distributions

(December 12, 2005) Altamira Investment Services, a subsidiary of the National Bank of Canada, published estimated distributions today for the company’s family of mutual funds.

Actual distributions in December for the funds could differ significantly from the estimates as a result of changes in market activity, portfolio activity or the level of purchases and redemptions.

Estimates for the group of 15 funds are based on income and capital gains earned during the period ended November 30, 2005, less any distributions paid by the end of November 2005.

The company plans to pay year end distributions for the Altamira Capital Growth Fund, AltaFund Investment Corp. and Altamira Dividend Fund on December 31. All other fund distributions will be paid on December 15.

A complete list of estimated distributions can be found online at

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