By Staff | June 1, 2006 | Last updated on June 1, 2006
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(June 1, 2006) BMO Mutual Funds has announced the launch of two new monthly income funds aimed primarily at the boomer market.

“Given that one in two Canadian boomers can expect to live into their nineties, it’s not surprising that they are now re-evaluating not only how they are going to occupy this time, but how they’re going to pay for it,” said Ed Legzdins, president and CEO, BMO Investments.

The BMO Income Trust Fund will focus on providing tax efficient monthly cash distribution, with a current target distribution of six cents per unit. As the name suggests, the fund will invest primarily in income trusts. It will be managed by the Guardian Capital team of John Priestman, Michelle Robitaille and Kevin Hall.

The BMO Diversified Income Fund will invest primarily in Canadian and foreign bonds and equities, income trusts and global high yield bonds. This fund will be lead-managed by Jones Heward Investment Counsel, with sector support from UBS Global Asset Management, PIMCO and Guardian Capital. The target distribution for this fund is also six cents per unit.

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Ontario sets rates for provincial savings bonds

Ontario Savings Bonds, which went on sale June 1, will offer interest rates that are only slightly better than high-interest savings accounts.

In a statement, the government says its five-year step-up bond interest rates for this year are 3.7%, 3.8% in the second year, 3.9% in the third year, 4% in the fourth year and 4.25% in the final year. The three-year fixed-rate bond interest rate is 4.10%, and the seven-year variable-rate bond rate is 3.90% for the first six months.

The province also set the interest rate for the next six months for the 2000-2005 variable-rate at 3.9%.

The bonds are available until June 21 and are fully-backed by the Ontario government. Investors can purchase the bonds for as low as $100, and up to $500,000.

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Jobs market remained strong in 2005

(June 1, 2006) The Canadian labour market extended its winning streak in 2005, making the 13-year run of increasing employment the longest since the 1970s, according to StatsCan. Employment growth has averaged 2.0% over the past 13 years.

There were about 17.3 million people in the labour market last year, accounting for about 67.2% of the total working-age population. That marks a 0.3% decrease in the participation rate, which has climbed steadily from 1996 to 2003. StatsCan attributes much of the decline to aging baby-boomers, adult women and young people leaving the work force.

At the same time, demand for labour continued to strengthen, driving down the unemployment rate, which hit 6.8%, the lowest annual rate since 1976.

While baby-boomers may have been voluntarily leaving the workforce, employment among people aged 55 and over increased, from 29.0% in 2004, to 29.9% in 2005. An estimates 3.6 million workers were within 10 years of the median retirement age of 61.

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NexGen names custodian, transfer agents

(June 1, 2006) NexGen, the new fund company launched by Jim Hunter in May, has appointed State Street and International Financial Data Services to provide custody, fund accounting and transfer agency services.

“The accounting and recordkeeping requirements of these funds demand the proven expertise of providers who have the capabilities to handle complex instruments,” said James Hunter, founder of NexGen. “We are confident that State Street and IFDS are uniquely suited to offer the knowledge and service we need to build a competitive, world-class fund offering.”

NexGen offers 26 funds which are designed to “alleviate the tax burden associated with traditional mutual funds.”

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Mackenzie offers U.S. dividend income fund

(June 1, 2006) Mackenzie Investments has launched a new product, the Mackenzie Universal U.S. Dividend Income Fund, which will offer a fixed monthly distribution and invest in American large-cap dividend stocks. The distribution will be fixed at 5% of the initial offering price

“Investors continue to look for solid income-related investment products, both in Canada and around the world,” said David Feather, president, Mackenzie Financial Services. “The Universal U.S. Dividend Income Fund gives Canadians more choice in this area, along with access to the U.S. markets and a consistent income stream.”

The fund is available in both hedged and un-hedged versions, allowing investors to choose their exposure to currency volatility. The unhedged class will be available in both Canadian and U.S. denominations. The hedged class is priced in Canadian dollars and converted to U.S. dollars at the time of purchase or redemption only.

The fund is available in front-end, back-end and low-load purchase options, and is considered suitable for investors with a medium tolerance for risk who seek income generation and long-term capital growth.

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Jovian takes control of Horizon

(June 1, 2006) Jovian Asset Management has acquired a controlling stake in Horizons Funds, a developer, distributor and manager of alternative investment products, including the Horizons Mondiale Hedge Fund.

“This acquisition represents another important step in helping our asset management platform become a significant player in the management of alternative asset products,” said Philip Armstrong, president and CEO of Jovian.

Jovian paid $605,000 in cash and has issued 2,028,774 common shares for the 51.7% stake, or about $2,654,000, with the Jovian shares to be held in escrow for two years. The purchase brings Jovian’s stake in Horizons to 53.7%. Jovian said in a statement is planned to acquire more Horizon shares over time.

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