Toronto-based Dynamic Funds announced plans on Friday to pursue fee reductions to several mutual funds as well as to eliminate the deferred sales charge (DSC) purchase option for all the products within its lineup.
Dynamic Funds also plans to cap or eliminate the fees and expenses associated with certain series options. These changes are billed as a way to simplify its product offering.
“No matter if an advisor works within a fee-based or traditional embedded fee structure, their clients will receive the lowest offered fee level without the need to switch to a different series,” says Mark Brisley, managing director and head of Dynamic Funds, in a statement.
Management and administration fees will be lowered for Series A and may also apply to Series T, H, L and N — depending on whether the fund is among the list of 83 funds slated for fee reductions. The aggregate cost, depending on the fund, will be lowered by up to 66 basis points (bps), the statement says.
Read: Dynamic proposes various fund mergers
Further reductions to the management fee will be applied to individual investors who have than $250,000 invested in the 83 funds. If the investment reaches a threshold of $250,000, $1 million and $5 million, a reduction between 5 bps and 22.5 bps will be applied automatically.
In addition, Series E on all funds will no longer accept new investors as of June 1 —when all the specified fee reductions kick in. Those who currently hold Series E can continue to make purchases beyond that date.
Dynamic is also lowering the minimum investment threshold for Series I, IT and IP to $25,000 from $100,000, effective June 1.
As for the series that will see a cap in new investments, those affected include: certain funds within Series P, FP and IP, starting March 31; all funds within Series G and certain funds within Series FI, both as of June 1.
As of June 30, the DSC purchase option will be closed to new investments. Those with existing holdings can still “remain invested in their positions in accordance with their DSC schedule,” the announcement says.
Scrapping the DSC reflects a shift within the industry as many advisors have opted to move away from that model, Brisley says.
Read: Are DSCs dead?
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