By Staff | September 26, 2005 | Last updated on September 26, 2005
8 min read

(September 28, 2005) Seven RBC Financial Group branches in Toronto are going green after signing on with Bullfrog Power, the only electricity retailer in Ontario that sources power exclusively from wind and low-impact hydro generators that meet the federal government’s EcoLogo standard for renewable electricity.

RBC is already active in financing alternative energy sector companies in Canada and abroad. The company is listed on the FTSE4Good Global Index that tracks corporate responsibility standards like environment sustainability, stakeholder relations and universal human rights and Canada’s Jantzi Social Index of 60 Canadian companies that pass a set of social and environmental screens. RBC was also named to the 2005 and 2006 Dow Jones Sustainability Index which recognizes financial, social and environmental corporate leaders.

“RBC believes that sustained economic growth and a healthy environment are inextricably linked,” says Chitwant Kohli, vice president of corporate real estate at RBC. “The decision to switch seven of our GTA branches to become ‘bullfrog-powered’ forms part of our goal to reduce energy usage and emissions across our operations. This goal will be achieved through a combination of conservation and energy efficiency measures and the sourcing of clean, renewable energy like Bullfrog Power.”

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Rising fuel costs drive business confidence lower in September

(September 28, 2005) The latest quarterly survey by the Canadian Federation of Independent Business (CFIB) shows business confidence fell again in September, largely as a result of rising fuel prices.

Among the owners surveyed at small and medium-sized enterprises, 88% said energy prices are a major cause of concern. “The drop in optimism we see in this quarter is likely temporary, but recovery will depend on the future path of fuel costs,” says CFIB chief economist and vice president of research Ted Mallett.

Businesses in Alberta and British Columbia continue to be the most optimistic across the country while businesses in the Maritimes showed sharply lower optimism compared to previous surveys. For the second quarter in a row, optimism is also down in central Canada, particularly in Quebec.

Apart from fuel prices, insurance premiums were also a source of concern for 61% of the survey’s respondents. Overall, the CFIB Quarterly Business Barometer Index is four points lower than levels reported in June and almost seven points below previous highs, registered in March 2005.

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Guardian and Ethical form new firm

(September 28, 2005) Guardian Capital and The Ethical Funds Company have joined forces to create a new firm, aimed at the institutional market.

Guardian Ethical Management (GEM) will specialize in providing socially responsible investing (SRI) services to institutional investors.

“We see a real opportunity for growth in the institutional side of the SRI business in Canada and together with our partners at Guardian Capital we want to proactively pursue it,” says Ethical president Don Rolfe. “The market is already well developed in both Europe and the United States. GEM will allow us to offer sustainable investing to a new group of investors.”

Initially the firm plans to offer five mandates covering balanced funds, Canadian equity, global equity, fixed income and diversified income on both a segregated and pooled fund basis.

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CI and CIBC launch new series of guaranteed deposit notes

(September 28, 2005) CIBC and CI Investments have teamed up to launch the CIBC CI M.A.X. Deposit Notes, Series 1. The product is linked to the performance of CI’s Signature Income & Growth Fund, managed by Eric Bushell, which invests in a mix of income-generating securities, including equities, trusts and high-yield bonds. The notes are on sale until November 11, 2005.

Assets will be divided according to pre-determined allocation rules, between units of the fund and a bond account. Investors will be paid monthly distributions worth 75% of ordinary distributions payable to the fund. All other distributions will be reinvested in the structure. Investors may also receive an additional variable payment when the notes mature, if the net asset value of the portfolio exceeds the principal investment.

Management fees are equal to 2.75% of the value of the units plus 0.5% of the face amount of the bonds each year. The full principal amount will be returned to investors when the funds mature in 2013. Minimum investment is $5,000.

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Claymore Investments to launch new income fund

(September 28, 2005) Claymore Investments has filed a preliminary prospectus for a new diversified fund that will invest in the top 100 Canadian equity securities.

The Canadian Fundamental 100 Income Fund will select and weight its holdings according to Research Affiliates fundamental index strategy, which is based on total cash dividends, free cash flow, total sales and book equity value.

The fund’s IPO is set at $10 per unit. Claymore Investments, which is a wholly owned subsidiary of the Claymore Group, hopes the fund will provide unitholders with monthly cash distributions of $0.05 a unit, or yield 6% based on the IPO price. The Claymore Group currently manages about $12.3 billion US in assets.

The firm recently completed the IPO of another Canadian fund — the Canadian Financial Income Fund — which invests in a diversified and actively managed portfolio comprised mainly of common shares, corporate bond and income trust units of issuers in the Canadian financial sector. The fund, which is listed on the TSX, is currently trading just below its IPO value.

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ScotiaMcLeod replaces portfolio advisors on pair of Pinnacle funds

(September 27, 2005) ScotiaMcLeod has appointed Integrity Asset Management as the new portfolio advisor for the Pinnacle American Mid Cap Value Equity Fund, replacing BlackRock Financial Management. The change takes effect October 3.

Kentucky-based Integrity has more than $700 million in assets under management and was selected “for the depth of their experience and their highly disciplined investment process which focuses on a combination of prudent value and improving sentiment,” ScotiaMcleod said in a statement.

The firm also announced today that Scotia Cassels Investment Counsel — a subsidiary of Scotiabank — will be the new portfolio advisor for the Pinnacle Short Term Income Fund, replacing UBS Global Asset Management.

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OpenSky Capital launches new series of index optimizer notes

(September 27, 2005) OpenSky Capital has introduced a third series of its principal protected index optimizer U.S. dollar notes, guaranteed by Citibank.

The notes allow investors to lock-in the return of the best performer from among eight world indexes, including the S&P 500, FTSE and the Russell 2000, (from settlement date and subject to a maximum of 12%) each year.

The index selected in the preceding years will then be excluded for computing future locked-in performances.

The notes are available until November 25.

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RBC to restrict sales on income fund

(September 27, 2005) RBC Asset Management’s popular RBC Monthly Income fund will be closed for new purchases to registered plans, effective December 9.

Unitholders with pre-authorized purchase plans established on or before December 9 will be exempt from the restriction and the fund will continue to accept new purchases from non-registered investment accounts.

“The RBC Monthly Income Fund is a tremendous success and will continue to be an important offering in RBC’s range of income solutions,” said RBC Asset Management president Brenda Vince.

“As the fund continues to grow, we want to ensure that it remains primarily available to investors seeking regular tax-efficient cash flow. Closing the fund to new purchases in registered plans will allow non-registered investments, where unitholders receive the benefit of the fund’s tax-efficient, monthly distributions, to continue to grow,” added Vince.

According to Morningstar Canada, the $7 billion fund has nearly doubled in size over the past 12 months.

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CIFSC changes fund definitions

(September 26, 2005) The Canadian Investment Funds Standards Committee (CIFSC) announced approved changes today to the Canadian Income Balanced category of mutual funds. As of September 30, funds will be required to make distributions of income or realized capital gains on a monthly basis in order to remain in the category.

CIFSC will also drop current requirements that say funds must have a three-year median income distribution to net asset value ratio (INAV) greater than the median INAV in the Canadian balanced category.

The changes are a result of fund manager commentary that suggested the original definitions, introduced when the category was created earlier this year, lacked transparency and inappropriately included funds making quarterly distributions, but not managed like income-oriented balanced funds. The CIFSC will remove all funds currently in the Canadian Income Balanced category that only make quarterly distributions as of September 30.

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AGF announces compliance partnership, launches portfolio program

(September 26, 2005) AGF Funds launched AGF Elements today, a product offering five diversified portfolios, and announced a new partnership with Wilshire Associates to handle portfolio construction and due diligence.

Under the program, if a portfolio does not match or outperform its benchmark over a three-year average annualized period, the company will give investors up to 90 basis points in the form of new units.

Wilshire meanwhile is responsible for independent due diligence, portfolio construction, asset allocation and quarterly rebalancing.

“We will put our money where our mouth is if we do not meet or exceed the portfolios’ benchmarks,” says executive vice president, Randy Ambrosie. “We have also responded to the needs of investors and advisors by designing a solution that addresses their concerns about independence and objectivity.”

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CI announces fund mergers and name changes

(September 26, 2005) CI Investments is continuing with its plans to streamline the company’s fund lineup. Today CI announced it is making name changes, eliminating one of the company’s brand names, and announced a proposal to merge several funds.

A number of the changes follow the elimination of the foreign content limit for registered plans. The terminating funds have the same portfolio manager as the funds they are being merged with. Under the plan, five Synergy Canadian Fund classes will be merged with or converted into CI Corporate Class funds. The Synergy funds were considered Canadian content for registered plans where the CI Corporate funds were considered to be foreign content holdings.

The company is also discontinuing a number of RSP version CI Guaranteed Investment Funds, including all class A and B versions, and merging assets with their underlying funds. The company also intends to rename all BPI branded funds and segregated funds.

Synergy shareholders will vote on the proposed mergers at a series of special meetings in Toronto on November 24. Changes come into effect on November 28.

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Goodman & Company announces changes to Dynamic lineup

(September 26, 2005) Goodman & Company announced its own initiative to streamline its product lineup and reduce management fees on a number of Dynamic mutual funds.

The company announced a series of mergers and strategic changes to several related brands to eliminate overlap caused by previous acquisitions and reduce costs for security holders by merging funds with similar investment objectives.

The lower fee schedule takes effect on October 1. According to the plan, Goodman says it will reduce management fees between 10 and 50 basis points on eight existing Dynamic funds. Mergers in another 13 funds will also result in lower management fees for investors of the terminating funds.

In line with plans to re-brand several Cartier funds as part of the Marquis Investment Program in early 2006, Goodman also proposes to merge several Cartier funds into established Dynamic funds with similar objectives, and merge the MultiPartners-branded Global Balanced, Balanced Growth and High Growth portfolios into three Radiant Strategic Portfolios. Several principal guaranteed funds will be replaced with a one-time payment from Goodman & Company, equal to the proceeds which would have been paid if the merger date was the maturity date for each investment in those funds.

Investors holding the Dynamic-branded Canadian Precious Metals, Canadian Technology, Focus+ Balanced, Focus+ Canadian, Focus+ Real Estate and Focus+ Resource funds, will also be asked to approve investment objective requirements that limit manager to investing primarily in Canadian securities.

Investors will be asked to approve the mergers and related changes at special meetings on November 10.

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The staff of have been covering news for financial advisors since 1998.