Claymore Canadian Financial Monthly Income ETF (TSX:FIE) will be changing its investment strategy to a passive quantitative methodology from the current actively managed approach, Claymore Investments, Inc. said Friday.

MFC Global Investment Management (Canada) will continue in its role as investment advisor to the fund, providing the underlying quantitative strategy with Claymore retaining portfolio execution responsibilities.

The fund will maintain its investment objective of maximizing total returns for investors while providing investors with a stable stream of monthly cash distributions.

In addition, Claymore will be reducing the management fee payable to Claymore from 1.00% to 0.65% with a corresponding increase in the service fee component from 0.40% to 0.75%. The total fee payable by the fund shall remain the same at 1.40% of the net asset value of the fund.

As a result, effective August 17, all existing units of FIE listed for trading on the Toronto Stock Exchange shall be redesignated as “Advisor Class” units and the ticker symbol of FIE will be changed to “FIE.A”.

“These changes are subtle, however very important to the long term success of the fund. FIE was the first active ETF in the world and we are very proud of that distinction. However, in working closely with MFC’s quantitative group in other Claymore ETFs, we recognized the strength of their strategy and value-add they can provide for the fund’s unitholders going forward. Overall, the movement to a passive strategy and the changes in the fee structure brings FIE in line with our broad lineup of Claymore ETFs,” Claymore said in a release.

MFC employs a proprietary quantitative multi-factor “bottom-up” selection process incorporating a number of factor rankings which are weighted differently based on a proprietary algorithm in order to select the top equity securities from the Canadian financial sector. The MFC team evaluates a broad range of market and economic variables to arrive at the appropriate asset allocation mix that includes the debt securities within the Canadian financial sector. The portfolio constituents of the Fund will be rebalanced on quarterly basis.

IE