Toronto-based Capital International Asset Management (Canada) Inc. is proposing a change to its mutual funds’ fee structure. Under the new model, the firm would pay certain operating expenses while charging the funds a fixed-rate annual administration fee.
This differs from the current system, under which each of the funds pays its own operating expenses, according to the firm’s announcement released Thursday.
The proposed change would apply to all fund series within the firm’s mutual fund lineup except for Series O, which does not involve any operating expenses. The administration fee would be calculated under one of three tiers, depending on a fund’s total net assets: less than $500 million, between $500 and $1 billion and more than $1 billion. As a fund’s net assets surpass each tier, the administration fee will decline.
“In fixing a large portion of the operating expenses based on each fund’s net assets, Capital Group aims to protect investors from potential increases in these operating expenses,” the firm’s announcement states.
Further details on the proposed fee structure are outlined in an amendment within the funds’ simplified prospectus documents.
The change is expected to be effective on or about July 1. The proposal is subject to unitholder approval by those who own Series A, B, D and T4 units of the funds while unitholders of all other series will receive written notice of the change at least 60 days before implementation.