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Market month: Fund news and updates

Published on 02-09-2024

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Fund announcements from Fidelity, Mawer, CIBC, BMO, NEI, Horizons, Invesco, Middlefield, Guardian


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Fund news

Fundata announces FundGrade A+ Award winners for 2023

Fundata Canada Inc. on February 1, 2024, announced the winners of the Fundata FundGrade A+ Awards for 2023. The twelfth annual A+ Awards “Evening of Excellence” was celebrated at Toronto’s Globe and Mail Centre where 65 companies were honoured, with 373 Canadian investment funds receiving A+ Awards.

The FundGrade A+ Award is given annually to investment funds and managers who have shown consistent, outstanding, risk-adjusted performance incorporating up to 10 years of history. The FundGrade A+ Award provides investors, advisors, and fund managers with a single, reliable, easy-to-understand fund-performance rating that is completely quantitative.

View the complete list of FundGrade A+ Award winners for 2023.

Fidelity launches new investment funds and ETF series

Fidelity Investments Canada ULC on Feb. 6 launched several new investment products:

Fidelity Canadian Long/Short Alternative Fund aims to achieve long-term capital appreciation by investing primarily in long and short positions of equity securities of Canadian companies. The fund is also available as an ETF trading on the CBOE CA Exchange under the symbol FCLS.

Fund manager Reetu Kumra uses both fundamental research and a rules-based approach to portfolio construction. The use of short selling is expected to be generally around 30% of the fund’s net asset value.

Fidelity All-Equity ETFs are strategically designed to provide diversified equity exposure with a regional focus.

The building blocks for each All-Equity ETF are Fidelity Factor ETFs, aimed at providing investment style factors, diversification, and a potential to earn higher risk-adjusted returns over traditional passive benchmarks in the long run. The All-Equity ETFs will be sub-advised by Geode Capital Management LLC, a global systematic investment manager.

Expanding ETF Series of existing alternative mutual funds. Fidelity will be introducing ETF Series on its existing alternative strategies to broaden access for investors who prefer the ETF investment vehicle:

Fidelity Market Neutral Alternative Fund (CBOE CA: FMNA) is a relative value (pair trading) strategy that aims to capture relative value spreads among stocks with similar market exposure, and is managed by Portfolio Manager Brett Dley.

Fidelity Long/Short Alternative Fund (CBOE CA: FLSA) is managed by Portfolio Manager David Way and seeks to capture alternative sources of alpha and reduce portfolio risk through short selling.

Fidelity Global Value Long/Short Fund (CBOE CA: FGLS) is managed by Portfolio Manager Dan Dupont and seeks to exploit mispricing of value-oriented stocks.

Mawer launches new absolute return credit fund

Mawer Investment Management on Jan. 31 launched its Mawer Global Credit Opportunities Fund. The fund aims for interest income and capital returns primarily from bonds, debentures, and other debt-like instruments of corporate issuers. Portfolio Manager Brian Carney has an absolute return objective and targets long-term, risk-adjusted returns over a full economic cycle.

IFIC releases 2023 Investment Funds Report

The Investment Funds Institute of Canada (IFIC) on Jan. 31 released its 2023 Investment Funds Report, which provides data and analysis of mutual fund and exchange-traded fund (ETF) sales and assets under management.

At the end of 2023, mutual fund assets were up by 7%  from 2022, despite total net redemptions. ETF assets were up by 22% from 2022, reaching their highest total ever at the end of the year.

“There are many reasons for changes in investor behaviour, but we know that mutual fund sales in 2023 were affected by market volatility, economic uncertainty, and rising inflation and interest rates,” said Andy Mitchell, IFIC’s President and CEO. “Many Canadians had to make tough financial decisions in order to put groceries on the table and pay the mortgage.”

Highlights of the report included the following data for 2023:

* At the end of 2023, Canadian mutual fund assets were $1.936 trillion and ETF assets were $382 billion.

* Mutual fund net redemptions were $57.1 billion and ETF net sales were $37.6 billion.

* High-interest savings mutual fund assets totalled $14.8 billion. High-interest ETF assets totalled $22.5 billion. Net sales into these funds accounted for 47%of all money market mutual fund sales and 83% of all money market ETF sales.

* Responsible investment (RI) mutual fund assets were $40 billion and RI ETF assets were $16.3 billion. In 2023, RI net sales were $538 million for mutual funds and $4.8 billion for ETFs.

CIBC launches new target maturity bond funds

CIBC Asset Management on Jan. 29 announced that three new target maturity bond mutual funds, known as CIBC 2025 Investment Grade Bond Fund, CIBC 2026 Investment Grade Bond Fund, and CIBC 2027 Investment Grade Bond Fund are now available for purchases.

In a release, CIBC said each CIBC Investment Grade Bond Fund provides a diversified portfolio of Canadian-dollar denominated investment grade corporate and government bonds with an effective maturity in the calendar year stipulated in their name. The funds will prioritize bonds that are trading at a discount to their maturity value, aiming for greater tax efficiency.

BMO launches new structured outcome U.S. equity ETF

BMO Asset Management on Jan. 26 launched its new BMO US Equity Buffer Hedged to CAD ETF – January (CBOE CA: ZJAN). The fund tracks the return of a “Reference Index” designed to measure the large-cap segment of the U.S. equity market up to a cap, while providing a buffer against the first 15% of a decrease in the market price of the Reference Index, over a period of approximately one year from the third Friday of January of each year to on or about the third Friday of January of the following year (referred to as the Target Outcome Period).

NEI launches long short equity fund

NEI Investments on Jan. 22 debuted the NEI Long Short Equity Fund, its first product offering in the alternatives space. The fund is sub-advised by Picton Mahoney Asset Management, a specialist in alternative investing in Canada.

The fund’s investment strategy includes exclusionary screens, ESG integration and stewardship to add an extra layer of risk mitigation to Picton Mahoney’s active long short equity strategy. It is designed to provide investors access to sophisticated investment strategies while aiming for enhanced risk-adjusted returns, lower volatility, and broader diversification.

Horizons terminates nine ETFs

Horizons ETFs Management announced on Jan. 19 that it will be terminating nine of its exchange traded funds effective at the close of business on or about March 28, 2024. The terminating ETFs are as follows:

Horizons did not provide any reasons for the terminations.

Invesco launches AI and floating rate index ETFs

Invesco Canada on Jan. 18 debuted two new exchange traded funds that includes a new ETF offering Artificial Intelligence (AI) thematic exposure as well as a new income generating strategy that can be purchased in US dollars.

The Invesco Morningstar Global Next Gen AI Index ETF (TSX: INAI) is based on the Morningstar Global Next Generation Artificial Intelligence Index, which is designed to deliver exposure to companies involved in the advancement of Artificial Intelligence technologies, including next generation AI technologies such as generative AI, AI data and infrastructure, AI services, and AI software technologies.

The Invesco US Treasury Floating Rate Note Index ETF (USD) (TSX: IUFR.U) tracks the FTSE U.S. Treasury Floating-Rate Note Index, which seeks to invest in U.S. Treasury floating rate notes with time-to-maturity greater than or equal to one month. The ETF offers Canadian investors the opportunity to access high-quality U.S. floating-rate notes in a Canadian ETF that is purchased in US dollars.

Horizons launches new USD High Interest Savings ETF

Horizons ETFs Management on Jan. 18 debuted its Horizons USD High Interest Savings ETF (TSX: UCSH.U). The fund aims to maximize monthly income while preserving capital and liquidity by investing primarily in high interest U.S. dollar deposit accounts with Canadian banks. In addition, the monthly income provided by the ETF is distributed in U.S. dollars while offering an interest rate that is expected to be competitive with other U.S. dollar high-interest savings vehicles.

Middlefield merges two real estate funds

Middlefield announced on Jan. 10 that its Sustainable Real Estate Dividend Fund (TSX: MSRE) will merge into the Middlefield Real Estate Dividend ETF (TSX: MREL), creating a larger fund with expected assets of over $120 million (based on current valuations). The merger is expected to be completed on or about May 16, 2024, with the Real Estate ETF being the continuing entity following the merger.

Guardian debuts suite of defined-maturity-date bond funds

Guardian Capital on Jan. 9 announced its GuardBonds suite of investment funds, which combine key features of fund investing with buying individual bonds. Each of the mandates in the GuardBonds suite will provide exposure to a diversified portfolio of Canadian-dollar denominated investment-grade bonds, which have a defined maturity date that corresponds to a specific calendar year. The funds are available in both mutual fund and ETF series:

GuardBonds 2024 Investment Grade Bond Fund (CBOE CA: GBFA)
GuardBonds 2025 Investment Grade Bond Fund (CBOE CA: GBFB)
GuardBonds 2026 Investment Grade Bond Fund (CBOE CA: GBFC)
GuardBonds 2027 Investment Grade Bond Fund (CBOE CA: GBFD)
GuardBonds 1-3 Year Laddered Investment Grade Bond Fund (CBOE CA: GBLF)

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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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