Product news: BMO latest to wind up corporate-class funds

By Mark Burgess | June 19, 2023 | Last updated on October 27, 2023
2 min read
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BMO Investments Inc. is the latest firm to wind up its corporate-class mutual funds.

The firm is proposing to merge its 18 corporate-class funds into existing funds later this summer, subject to a vote on Aug. 16.

The announcement follows similar moves from other firms including Mackenzie Investments, Ninepoint Partners LP and RBC Global Asset Management Inc. IG Wealth Management wound up the Investors Group Corporate Class Inc. in May, affecting 60 mutual funds.

Corporate-class funds, designed as a tax-efficient vehicle for non-registered investing, lost some of their advantages in 2017 when legislation made switching between classes a disposition at fair market value for tax purposes.

BMO said its mergers will take place on a tax-deferred basis.

BMO is also proposing to merge the BMO Bond Fund with the BMO Core Plus Bond Fund, and the BMO Tactical Global Bond ETF Fund with the BMO Fixed Income ETF Portfolio.

RBC infrastructure fund raises $600 million

RBC Global Asset Management Inc. raised more than $600 million in commitments for the RBC Global Infrastructure Fund LP, which will provide qualified investors access to directly held infrastructure assets. More than 1,800 institutional and individual Canadian investors participated, the firm said.

The fund is managed by Andrew Hay, head of global infrastructure investments at RBC GAM, and supported by the RBC GAM private markets team.

The infrastructure fund joins RBC’s real estate and commercial mortgage funds. As of March 31, the firm’s private markets platform had assets under management totalling more than $12 billion, the firm said.

RBC said it’s planning a second subscription period for the infrastructure fund once the majority of the initial capital has been deployed.

Asset management firms are increasingly venturing into private markets with financial advisors and their high-net-worth clients in mind.

Mackenzie announces fund closures

Mackenzie closed three of its “maximum diversification” index mutual funds on June 16, as well as two of its private pools.

The three maximum diversity funds, launched in 2016 and 2017, included funds for developed Europe, emerging markets and an all-world ex-U.S. fund. The strategies were created by Paris-based index provider Tobam to reduce concentration. The closed funds only had about $16 million in assets between them. There are still funds in the series covering Canada, the U.S. and an all-world fund.

The two pools that closed are the Mackenzie Private Global Income Balanced Pool, which merged into the Mackenzie Global Strategic Income Fund, and the Mackenzie Private Income Balanced Pool, which merged into the Mackenzie Strategic Income Fund.

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Mark Burgess

Mark was the managing editor of Advisor.ca from 2017 to 2024.