GCIC proposes fixed administration fees, other changes

In addition, effective immediately, the management fee charged to Series A and Series T shares of Dynamic Power Global Navigator Class will be reduced to 2.00% from 2.25% and the management fee charged to Series F shares of the fund will be reduced to 1.00% from 1.25%.

Fixed rate administration fee

GCIC will pay for all of the operating expenses of the Dynamic and Marquis funds other than those operating expenses listed below, effective September 1, assuming the proposal is approved by securityholders.

In return for paying the operating expenses, GCIC will receive a fixed rate administration fee from the funds. The operating expenses that the funds will continue to pay are costs and expenses relating to the independent review committee of the funds, new government or regulatory requirements, taxes, borrowing and interest and portfolio transaction costs. Until June 30, 2015, the funds may pay an adjustment payment to GCIC in the event there is a significant drop in assets.

Currently, each fund pays all of its own operating expenses, which comprise a portion of the management expense ratio (MER) of the fund. If accepted this proposal will provide investors with increased predictability and transparency in fees as components of the MER for the funds will become fixed rather than varying from year to year as they do presently.

Under the proposal, the fixed rate administration fee will range between 0.12% and 0.35% of the respective fund’s assets under management, depending on the fund. The fee will be 0.12% to 0.20% for fixed income funds, 0.14% to 0.22% for domestic balanced and equity funds, 0.14% to 0.35% for global balanced and equity funds, 0.16% to 0.30% for regional and specialty funds and 0.13% to 0.27% for portfolio solutions.

The fixed rate administration fee for each series of a fund will be lower than or equal to the actual operating expenses paid by such series of the fund during its most recently completed financial year. GCIC notes that similar fixed rate administrative fee proposals have been adopted by investors at a number of Canada’s largest mutual fund companies.

GCIC adds that the fund’s independent review committee and Board of Governors have concluded the fixed administration fee proposal is fair and reasonable to all funds and their securityholders.

Other proposed changes

In addition to the proposed fixed administrative fees, GCIC announced proposals to modify the language in the investment objectives of certain funds, to change the performance fee index for Dynamic Strategic Energy Class and to increase the number of classes that are authorized to be issued by Dynamic Global Fund Corporation and Dynamic Managed Portfolios Ltd. These proposed changes will also be considered at the special meeting.

Investment objectives

GCIC believes that the interests of securityholders of certain funds will be better served by modifying the language in the investment objectives of those funds. A summary of the proposed changes is available on the Dynamic Funds website.

Performance fee index

GCIC is proposing to amend the performance fee index for Dynamic Strategic Energy Class to include the S&P/TSX Capped Energy Index, in addition to its current index, the MSCI World Energy Index (C$). GCIC believes that the proposal to include the S&P/TSX Capped Energy Index better reflects the mandate of the fund.

Increase in classes authorized for issuance

Each corporate fund is a class of shares of Dynamic Global Fund Corporation or Dynamic Managed Portfolios Ltd. Each corporation is currently authorized to issue a fixed number of classes of shares and both corporations are very close to reaching their respective limits. Shareholders will be asked to approve an increase in the number of classes of shares that the corporations are authorized to issue in order to permit additional corporate funds to be created in the future.

GCIC Ltd. is a subsidiary of DundeeWealth Inc., which is a wholly owned subsidiary of Bank of Nova Scotia.