Montreal-based Standard Life Mutual Funds Ltd. Friday announced several changes to its fund offering. The changes relate to charge structure, trailing commission, new funds and risk rating.

“Given the current context where the number of funds and options keep increasing in the market, we want to ensure Standard Life mutual funds continue being attractive investment solutions for our customers while ensuring a balanced and sustainable set of funds,” says Patrick Loranger, manager, retail investment products at Standard Life.

Lower management fees

On October 31, Standard Life will reduce the management fees by 0.20% of the F-Series of Standard Life Monthly Income Fund, Standard Life Canadian Dividend Growth Fund, Standard Life Global Dividend Growth Fund and Standard Life Canadian Small Cap Fund. The lower management fees mean the management expense ratio (MER) of these funds will also decrease.

Standard Life will also reduce the management fees by 0.20% of the A-Series and E-Series of Standard Life Money Market Fund, Standard Life Canadian Bond Fund and Standard Life International Bond Fund, as well as the A-Series, E-Series and F-Series of Standard Life Corporate Bond Fund. The reduction will counterbalance higher operating expenses charged to these funds, and will not impact the MER, all other things being equal.

From low sales charge (LSC) to front-end sales charge

A new automatic feature will be offered to dealers for funds sold on or after November 1. As of year four from the original purchase date for a low sales charge option, Standard Life will automatically start paying trailing commission as if the fund had been bought under a front-end sales charge option. The new feature doesn’t impact the management fees and charges paid by the investors.

New charge structure for Legend Series
Effective on February 1, Standard Life will no longer pay the operating expenses of its entire suite of Legend Series funds. The change will result in an increase in the MER for 27 of the 31 funds in the Legend Series. A decrease of the management fees by 0.20% of the remaining four funds — Standard Life Money Market Fund, Standard Life Canadian Bond Fund, Standard Life Corporate Bond Fund and Standard Life International Bond Fund — will offset the operating expenses, leaving the MER intact.

Adding series

Pending regulatory approvals, October 31, Standard Life will add:

  • E-Series and Legend Series to Standard Life Short Term Bond Fund;
  • F-Series, E-Series and Legend Series to Standard Life High Yield Bond Fund; and
  • F-Series to Standard Life U.S. Dividend Growth Fund, Standard Life U.S. Equity Value Fund, Standard Life Global Equity Value Fund, Standard Life Global Equity Fund and Standard Life India Equity Focus Fund.

Updated risk ratings

As part of its annual review, Standard Life has changed the risk rating of Standard Life U.S. Dividend Growth Fund from “medium” to “low to medium” and the Standard Life International Bond Fund, from “low to medium” to “medium”. No material changes have been made however to the investment objectives, strategies or management of these funds.

The changes announced Friday apply to trust funds only. Corporate class funds are not impacted.