Mackenzie Financial Corp. has received permission to invest more than 10% of certain funds’ assets in debt issued by foreign governments or supranational agencies, according to a decision reported in Friday’s Ontario Securities Commission Bulletin.
Mackenzie sought the relief for certain funds, including a global bond fund (Mackenzie Sentinel Global Bond Fund), European and global equity funds, and a global balanced fund (Mackenzie Ivy Global Balanced Fund, Mackenzie Ivy European Class, Mackenzie Ivy Foreign Equity Fund, and Mackenzie Ivy Foreign Equity Class). The regulators granted the request, with additional conditions imposed on the equity and balanced funds.
Existing concentration restrictions prevent funds from investing more than 10% of net assets in any issuer, apart from debt issued, or fully guaranteed, by the government of Canada, a province, or the US.
The relief allows the funds to invest up to 20% of net assets in the debt issued, or guaranteed fully, by supranational agencies of foreign governments that are rated “AA” by Standard & Poor’s, or have an equivalent rating by approved credit rating organizations. They can also invest up to 35% of net assets in securities rated “AAA”.
Mackenzie says it believes that the requested relief will be in the best interests of the funds as it would provide each fund with more flexibility to achieve their investment objectives. “In addition, the higher concentration limits may allow the funds to benefit from investment efficiencies as certain foreign government treasury offerings are more readily available for investment (because of large, regular treasury offerings that match the maturity dates the funds seek) and trades can be completed faster in certain markets that are more readily accessible to foreign investment,” it says.
The relief is granted provided that: the securities are traded on a mature and liquid market; the funds’ prospectus discloses the additional risks associated with added concentration, and discloses the conditions of the requested relief, among other things. For the equity and balanced funds, additional restrictions apply.
Mackenzie funds receive permission to invest more than 10% in foreign debt
The relief allows the funds to invest up to 20% of net assets in the debt issued, or guaranteed fully, by supranational agencies of foreign governments that are rated "AA"
- By: James Langton
- September 16, 2007 September 16, 2007
- 14:40