Winnipeg-based Investors Group Inc. on Monday announced it will be discontinuing the deferred sales charge (DSC) purchase option for all its mutual funds effective Jan. 1, 2017. At the same time, fees on no-load funds will be reduced.
“DSC was created to provide discipline to long term investing but the marketplace has evolved,” says Jeff Carney, Investors Group president and CEO, in a news release.
The DSC option will be closed to all new lump sum investments, but will continue to be available for pre-authorized contribution (PAC) plans established before Jan. 1, 2017 until June 30, 2017. DSC fees will not apply to purchases under PAC arrangements after Dec. 31, 2016.
The DSC purchase option will still be available for reinvested distributions, switches from existing assets acquired under the DSC purchase option and for management fee and expense reductions that are reinvested into shares of the classes.
DSC purchase option changes apply to Series A, A- RDSP, TDSC, JDSC, and TJDSC, as well as the DSC purchase options available for Series C, Tc, Investors Canadian Money Market Fund, or any single series Investors Group Fund.
Fee reduction for no-load funds
Beginning in 2017, clients will be able to purchase no-load funds at an annualized fee reduction of between four and 10 basis points on the majority of Investors Group mutual funds.
“This will be an annualized weighted average annual fee reduction of approximately eight bps on the $11.4 billion in assets under management currently residing within the affected no-load series,” the company says.
This change represents a reduction of four to 10 bps in service fees on balanced and equity products, Investors Group says, and five bps in administration fees on fixed income.
For Series U equity and balanced products the reduction of four to 10 bps applies to the management fee.
The no-load purchase option changes apply to Series B, B-RDSP, TNL, JNL, TJNL, U, and TU.
Series U units of Investors Real Property Fund will remain open, but purchases of Series U units made after Dec. 31, 2016 will no longer be subject to DSC fees, unless the investment was switched into Series U from an investment that was subject to a DSC schedule.
For the no-load purchase option of Series C and TC, eligibility for service fee refunds will be aligned with the DSC purchase option of those series.
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