GDP reports showed that economic growth softened in both Canada and the
U.S. In Canda, Statistics Canada reported 0% month-over-month growth in
February GDP as manufacturing faltered in the month. Year-over-year,
however, February GDP posted 2.5% growth.
In the U.S. first-quarter GDP grew 0.7% from the fourth quarter of 2016,
for year-over-year growth of 1.9%, as lagging consumption and growing
inventories weighed on growth. The soft growth continues a string of weak
first-quarter results for the past several years, with a rebound in GDP
growth expected in the second quarter.
In business news, shares of Canadian mortgage lender
Home Capital Group Inc. (TSX: HCG)
plunged last week as $762 million in deposits were withdrawn from its Home
Trust Co. subsidiary. The company’s main business is providing uninsured
mortgages to borrowers who cannot obtain loans from the major banks. It
also offers consumer deposits through its Oaken Financial brand.
The run on the company began last week, following accusations by the
Ontario Securities Commission that the company and some of its executives
had misled shareholders over fraud it had discovered in its brokerage
channels two years ago. On Thursday, the company obtained a $2-billion line
of credit from the Healthcare of Ontario Pension Plan to bolster the
company’s balance sheet, at an effective 22.5% interest rate. Analysts are
concerned that it won’t be enough to keep the company alive, and apparently
neither are investors, as share price plunged 65% on Wednesday, to about
$6.50 from Tuesday’s close of $17.09, and closed Friday at $8.04.
* Mackenzie adds to income fund lineup.
Mackenzie Financial Corp. debuted two new mutual funds and one ETF that is
says are “designed to generate income and improve portfolio
Mackenzie US Strategic Income Fund
invests primarily in U.S. dividend paying equities and a diversified
portfolio of fixed-income securities, including high-yield bonds and loans.
Foreign currency exposure is actively managed.
Mackenzie Global Credit Opportunities Fund
invests in investment-grade and non-investment grade corporate and
government bonds, including Emerging Market debt, loans, and preferred
Mackenzie Global High Yield Fixed Income ETF (NEO: MHYB)
aims for a steady flow of income with the potential for long-term capital
growth. In a release, Mackenzie said, “The manager applies disciplined
criteria including rigorous credit analysis, ongoing assessment of relative
and absolute valuations to help uncover the most attractive risk-adjusted
opportunities within the high yield asset class.”
* Front Streeet proposes fund merger.
LOGiQ Capital 2016 and Front Street Mutual Funds Ltd. announced a proposal
Front Street Growth and Income Class
Front Street Balanced Monthly Income Class
in order to reduce costs and improve diversification, according to a
release. Subject to approvals, the Merger is expected to be completed on or
about June 16, 2017.
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