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Fund news: Births, deaths, and mergers

Published on 01-31-2020

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A flurry of New Year’s activity for fund companies


Fund companies quick off the mark in January

CI launches liquid alt ETFs

CI Investments Inc. announced on Jan. 28 the debut of three CI Liquid Alternative strategies in an ETF structure and listed directly on the Toronto Stock Exchange. The ETFs mirror the strategies of CI's liquid alternative mutual funds:

CI Lawrence Park Alternative Investment Grade Credit ETF (TSX: CRED; TSX: CRED.U).

CI Marret Alternative Absolute Return Bond ETF (TSX: CMAR; TSX: CMAR.U).

CI Munro Alternative Global Growth ETF (TSX: CMAG).

Evolve terminates three ETFs

Evolve Funds Group Inc. announced on Jan. 27 that it will terminate Evolve North American Gender Diversity Index Fund (TSX: HERS, HERS.B), Evolve Marijuana Fund (TSX: SEED), and the Evolve U.S. Marijuana ETF (NEO: USMJ) on or about March 30, 2020. Effective Feb. 26, 2020, no further subscriptions for units of the Funds will be accepted.

Horizons closes down two ETFs

Horizons ETFs Management said on Jan. 24 that it will shut down Horizons Canadian Dollar Currency ETF (TSX: CAN) and Horizons S&P/TSX 60 Equal Weight Index ETF (TSX: HEW), effective March 27, 2020.

Vanguard debuts single-ticket global fixed-income ETF

Vanguard Investments Canada Inc. on Jan 23 debuted the Vanguard Global Aggregate Bond Index ETF (CAD-hedged) (TSX: VGAB), its new single-ticket global fixed income ETF. It tracks the Bloomberg Barclays Global Aggregate Float Adjusted Composite Index (CAD-hedged) and invests global investment-grade fixed-income markets, also using derivatives to hedge foreign currency exposure.

The ETF is made up of two existing Vanguard ETFs, the Vanguard U.S. Aggregate Bond Index ETF (CAD-hedged) (TSX:VBU) and the Vanguard Global ex-U.S. Aggregate Bond Index ETF (CAD-hedged) (TSX:VBG).

Scott Johnston, Head of Product, Vanguard Investments Canada Inc., said, "Canadians can access a broad global universe of over 15,000 fixed income securities in one fund, with diversification across different countries, issuers and term structures, overseen by Vanguard’s disciplined global fixed income investment teams.”

Fidelity debuts two new ETFs and mutual funds

Fidelity Investments Canada on Jan. 22 launched two new high-income actively-managed ETFs and sister ETF mutual fund versions, along with a new U.S. equity fund.

Fidelity Canadian Monthly High Income ETF (TSX: FCMI) and mutual fund. The fund targets a steady flow of income and potential capital gains by using an asset allocation approach and invests in underlying funds that hold a mix of Canadian and foreign equity securities and fixed-income securities, with an emphasis on Canadian equity and fixed income.

Fidelity Global Monthly High Income ETF (TSX: FCGI) and mutual fund aims for income with the potential capital gains, using an asset allocation approach that invests in underlying funds that hold global equity and fixed-income securities.

Fidelity U.S. Growth Opportunities Class. Manager Kyle Weaver looks for business models that can create significant shareholder value over three to seven years and focuses on undervalued situations.

On Jan. 16 Fidelity also announced the proposed mergers of Fidelity Event Driven Opportunities Fund into Fidelity Canadian Opportunities Fund. It also plans the merger of Fidelity Event Driven Opportunities Class and Fidelity Event Driven Opportunities Currency Neutral Class into Fidelity Canadian Opportunities Class. Subject to approvals, the mergers are expected to be completed in June.

BMO launches new ESG ETFs

BMO Asset Management Inc. on Jan. 21 launched seven new ESG (environment, social and governance) ETFs.

BMO Balanced ESG ETF (TSX: ZESG) includes both major equity markets and fixed-income securities through a balanced asset allocation of 60% equity and 40% fixed-income exposure.

BMO MSCI Global ESG Leaders Index ETF (TSX: ESGG)
BMO MSCI Canada ESG Leaders Index ETF (TSX: ESGA)

These ETFs follow the best-in-class approach of the MSCI ESG Leaders Indexes, while capturing market returns by targeting the top 50% ESG-rated equities within sectors and industries, while excluding such industries as alcohol, gambling, tobacco, and weapons.

BMO ESG Corporate Bond Index ETF (TSX: ESGB)
BMO ESG US Corporate Bond Hedged to CAD Index ETF (TSX: ESGF)

These funds invest in investment-grade corporate bonds that have the highest MSCI ESG Ratings.

BMO Global High Dividend Covered Call ETF (TSX: ZWG) holds high-dividend equities, utilizing some ESG integration and building off BMO’s existing covered-call methodology.

BMO Premium Yield ETF (TSX: ZPAY, ZPAY.U, ZPAY.F) invests in large-cap U.S. equities combined with derivative strategies to determine equity entry and exit strategies.

Dynamic launches liquid alts pool

Dynamic Funds on Jan. 20 launched Dynamic Liquid Alternatives Private Pool that is managed using investment strategies beyond the reach of a traditional mutual fund. It uses three alternative strategies – long-short equities, long-short credit and alternative income – and aims for long-term positive absolute returns that are not highly correlated to major asset classes, by investing primarily in one or more alternative mutual funds.

Mark Brisley, Managing Director of Dynamic Funds, said, “Liquid alternatives have emerged as an important component of portfolio construction. With the addition of this new Pool, financial advisors have greater options to use liquid alternatives in a manner that best suits their clients.”

Harvest debuts U.S. bond ETF

Harvest Portfolios Group Inc. on Jan. 15 debuted its Harvest US Investment Grade Bond Plus ETF (TSX: HUIB) which holds U.S. investment-grade corporate bonds. Amundi Canada Inc. and its U.S. affiliate, Amundi Pioneer Institutional Asset Management, will manage the fund.

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The foregoing is for general information purposes only and is the opinion of the writer. No guarantee of investment performance is made or implied. It is not intended to provide specific personalized advice including, without limitation, investment, financial, legal, accounting or tax advice.

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