The Canadian Investment Funds Standards Committee has shifted 48 funds to new categories following its first quarterly review of funds under its new classification system.

The review identified 48 funds (out of more than 8,000) that in the past three months have shifted their portfolio allocations enough to warrant moving them into new categories.

The managers of these funds have been advised and offered an opportunity to respond, it said.

Another 13 funds have seen their portfolios change enough to put them at a category threshold. These funds are not being moved, but will be monitored for possible future reclassification, the CIFSC says.

When the new classification system was implemented in August, the CIFSC said it would conduct a complete review of all funds and their categories every quarter. This plan was designed to ensure funds that have been making significant changes in their portfolio allocations would be identified and, if applicable, moved to more appropriate new categories.

In light of the Canadian government’s proposal this week to change the tax treatment of income trusts, the CIFSC reaffirmed its decision to retain a separate income trust category during its 2006 fund-category system revisions.

“The announcement serves as an endorsement of our decision to retain this category,” CIFSC chairman Ralf Hensel says. “During our review process, we retained our Canadian Income Trust category because of the different risk profile associated with them. At the time there was a great deal of uncertainty as to the government’s position and the market behaviour of income trusts, so we felt it appropriate to keep the category until the market had worked through the issues.”