Toronto-based Mackenzie Financial Corp. Tuesday announced a significant overhaul of its product lineup. The proposed changes include 29 fund mergers, two new funds, changes to investment objectives of three funds and a new fund naming convention that will see some fund sub-brand names, such as Maxxum, dropped.

Mackenzie says it is simplifying and restructuring its product offering so it is easier to understand and navigate. Faced with so many fund choices across the industry, advisors have expressed that it has become too complicated and time-consuming to figure out what each fund represents.

“It’s one of the largest overhauls in the fund industry, and we’ve reduced the number of fund mandates by about a third,” says Mary Taylor, Mackenzie’s executive vice president of product and marketing. “Too much choice can make it difficult for advisors and their clients. There’s such a thing as tyranny of choice.”

As Mackenzie has grown over the years, and acquired new fund families, some product duplication has arisen, Taylor says. There are also some funds, particular in narrow niches, that simply don’t have enough “traction” to justify the expense of offering them as standalone funds.

Mackenzie conducted research with focus groups, questioning advisors about their opinions on its fund lineup.

“The message was lout and clear that we have too many funds and too many brands,” Taylor says. “There was no confusion about the issues. We took action and initiated a project to simplify the fund lineup.”

Advisors also told Mackenzie it would make sense to consolidate its lineup all at once, rather than in stages. Once the merging is completed, the number of fund mandates will be reduced to 61, from 85 originally.

Proposed mergers

Mackenzie proposes to merge several funds with narrow investment mandates (e.g., health sciences, technology) as well as several funds that are sub-scale or overlap with others. All told, there are 29 proposed fund mergers involved in this revitalization.

Of the 29 mergers, 19 are proposals conditional upon investor and regulatory approval. If approved, the applicable terminating funds will no longer be available for new purchases, effective July 31, and the effective date of these mergers is expected to be on or about August 2.

The remaining 10 fund mergers were reviewed and approved by the Independent Review Committee (IRC) of the Mackenzie Funds on April 18. Investors in the funds will be provided 60 days’ written notice before the changes take effect on August 16.

Fund launches

Mackenzie is iaunching two new funds designed to satisfy investors’ heightened desire for income and more defensive investing. The two funds slated to launch on May 7 are both managed by the Mackenzie fixed income team.

> Mackenzie Strategic Bond Fund seeks to provide a steady flow of income by investing primarily in Canadian government and corporate fixed-income instruments and asset-backed securities with maturities of more than one year. Preservation of capital is an important factor in the selection of portfolio investments.

> Mackenzie Floating Rate Income Fund seeks to generate current income by investing primarily in floating rate debt obligations and other floating rate debt instruments of issuers located anywhere in the world.

Fund enhancements

  • Effective May 1, the fixed-income portion of the following balanced funds will be managed by the Mackenzie Fixed Income Team: Mackenzie Ivy Global Balanced Fund,
  • Mackenzie Ivy Growth & Income Fund and
  • Mackenzie Cundill Canadian Balanced Fund.

With the changes, the fixed-income portion of all Mackenzie balanced funds will be managed by a dedicated fixed-income team. There are no changes to the equity portion or the asset allocation of the three balanced funds referenced above.

Mackenzie has also appointed Singapore-based subsidiary Mackenzie Investments Pte. Ltd. as a sub-advisor to Mackenzie Absolute Return Asia Fund (to be renamed Mackenzie Asian Bond Fund) and Symmetry Global Bond Fund, to manage Asian fixed income and global macro strategies. Neither fund is available to retail investors but each will be allocated a weight in the global fixed-income component of select Symmetry Portfolios.

Renaming investment teams

To help clarify investment choices for advisors, effective immediately many of the Mackenzie investment teams will be identified by their areas of expertise rather than sub-brand name. For instance, the Mackenzie Saxon Team will be renamed the Mackenzie All Cap Value Team.

Taylor says the renaming of some Mackenzie funds will see seven brand names disappear, including Saxon, Sentinel, Maxxum, Universal, Focus and Founders.

“With so much product available it can be difficult for advisors to figure things out, and some of the naming conventions don’t help,” Taylor says. “Advisors like to see a name that reflects an investment style or geographic focus.”

Familiar team names Cundill and Ivy, along with the Symmetry managed asset program, are well-established and understood, and will remain.

Each of the 10 investment management teams will remain in place and continue to manage funds according to their distinct investment discipline and process.

New fund-naming convention, effective July 15

Many Mackenzie funds will be changing their name to provide better consistency, transparency and clarity of the fund’s investment objective. Mackenzie says it is making it faster and more convenient for advisors and investors to choose a fund by working to ensure that each fund name adequately describes its investment mandate and objective. For example, Mackenzie Maxxum Dividend Fund will be renamed Mackenzie Canadian Large Cap Dividend Fund. A complete list of name changes is available here.

Proposed enhancements to investment objectives

Subject to investor approval, the four funds will have their investment objectives enhanced. The investor meetings to vote on the proposed investment objective changes will be held on July 24. The effective date for the investment objective changes, if approved, is expected to be on or about July 26.

> Mackenzie Ivy Enterprise Fund and Mackenzie Ivy Enterprise Class
The investment objectives of these funds will be broadened so the funds can invest primarily in equity securities of small- and mid-capitalization companies anywhere in the world. Current limitations to investing mainly in North American small- and mid-capitalization companies will be lifted. Phil Taller, with specific expertise in US small-to-mid-cap equities, and Chuck Bastyr, with specific expertise in global small-to-mid-cap equities, will co-manage these funds. The funds will be renamed Mackenzie Global Small Cap Growth Fund and Mackenzie Global Small Cap Growth Class, respectively.

> Mackenzie Universal Global Infrastructure Income Fund
Investment objectives will expand so the fund can invest primarily in equity securities of companies anywhere in the world that pay, or may be expected to pay, dividends. Current limitations to investing primarily in infrastructure-related businesses will be lifted. The fund will be renamed Mackenzie Global Dividend Fund.

> Mackenzie Universal North American Growth Class
Investment objectives will change so the fund can invest primarily in equity securities of American companies. Current ability to invest mainly in equity securities of North American companies will narrow. The fund will be renamed Mackenzie US Growth Class.

To view a complete list of fund changes, proposed mergers, and current funds and the new names, please visit mackenzieinvestments.com/now.

Mackenzie is a member of the IGM Financial Inc. (TSX: IGM) group of companies.

— With files from Jade Hemon