Product news: Invesco, Canada Life target funds for macro environment

By Mark Burgess | August 1, 2023 | Last updated on August 1, 2023
3 min read
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Invesco Canada Ltd. launched new ETFs that use multifactor strategies and target the clean energy transition.

The Invesco Russell 1000 Dynamic-Multifactor Index ETF (TSX: IUMF) and the Invesco International Developed Dynamic-Multifactor Index ETF (TSX: IIMF) track indexes that re-weight according to economic cycles and market conditions.

The securities in the funds are assigned scores based on value, momentum, quality, low-volatility and size factors, and the portfolio is adjusted accordingly during expansions, slowdowns, contractions or recoveries.

“Our three new ETFs will offer strategies that are relevant in the current macroeconomic environment, using dynamic factors and pertinent themes that speak to the modern direction of the Canadian marketplace,” said Pat Chiefalo, Invesco Canada’s senior vice-president and head of ETFs and indexed strategies, in a statement.

IUMF’s management fee is 0.34% and IIMF’s is 0.39%. The risk rating is medium for both funds.

The firm also launched the Invesco Morningstar Global Energy Transition Index ETF (TSX: IGET), another index fund targeting companies globally that Morningstar’s equity research team thinks will benefit from the energy transition.

The fund invests in companies focused on renewable energy, energy storage, carbon capture technology and hydrogen. The management fee is 0.35% and the risk rating is high.

Real assets

Canada Life has introduced a new mutual fund that invests in real assets as it looks to add inflation resilience to client portfolios.

The Canada Life Diversified Real Assets Fund is sub-advised by New York City-based real assets firm Cohen & Steers Capital Management Inc. The fund invests in global equity and fixed-income securities, aiming to maximize real returns in inflationary environments.

“Recently, we’ve seen inflation at 40-year highs and experienced considerable market volatility,” said Steve Fiorelli, senior vice-president, wealth solutions, with Canada Life. “We’re responding accordingly to help investors stay on track.”

The actively managed fund has a target allocation of 30% to resource equities, 25% to infrastructure companies, 20% to real estate companies (including real estate investment trusts), 5% to commodities, and 20% to fixed-income securities to manage volatility.

The allocation will rotate based on market conditions, and the fund can also invest in other mutual funds and ETFs.

The management fee ranges from 1.90% for Series A to 0.75% for Series F.

Getting active

Calgary-based Canoe Financial LP introduced new actively managed international bond and equity mutual funds.

The Canoe Unconstrained Bond Fund and Canoe Unconstrained Bond Portfolio Class are sub-advised by Indianapolis-based boutique investing firm Reams Asset Management. The funds’ “unconstrained” approach allows the managers to navigate across fixed-income sectors and manage duration.

The management fee is 0.70% for Series A and 1.20% for Series F of the bond fund, and 0.80% for Series A and 1.30% for Series F of the tax-efficient portfolio class. The risk rating for both is low.

The Canoe International Equity Portfolio Class, sub-advised by Montreal-based PineStone Asset Management Inc., focuses on high-quality international companies. The management fee is 1.75% for Series A and 0.75% for Series F, and the fund has a moderate risk rating.

Fund changes

TD Asset Management Inc. and 1832 Asset Management L.P. are the latest to announce caps and closures of corporate class funds.

1832 proposed winding up the Dynamic Managed Portfolios Ltd. (DMP) mutual fund corporation to streamline its product shelf and align with client preferences, with a vote to be held in October for a mid-November termination.

Under the proposal, the DMP Resource Class, DMP Power Global Growth Class and DMP Value Balanced Class would be wound into existing Dynamic funds.

TD said this week that it’s capping contributions to the TD Short-Term Investment Class. Existing unitholders can continue to hold units in the fund.

“Changing market and regulatory environments have reduced the tax-efficiency benefits of corporate class structures in Canada,” TD said in a statement.

Other fund managers have recently wound up or liquidated corporate class funds in response to legislative changes, fee compression and a shift to global investing.

Finally, Manulife Investment Management Limited said it’s terminating the Manulife EAFE Equity Fund on Nov. 24 as part of an effort to streamline its active fund lineup.

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Mark Burgess

Mark has been the managing editor of Advisor.ca since 2017. He has been covering business and politics for more than a decade. Email him at markb@newcom.ca.