Manulife Mutual Funds Thursday announced plans for a number of changes to its product offerings, including implementing certain fund mergers, a portfolio manager change, a fund name change and risk rating changes.
Manulife intends to merge four funds on October 24, followed by mergers of 11 funds on November 7. These mergers are designed to simplify Manulife Mutual Funds’ investment platform, remove sub-scale products, and manage Manulife Investment Exchange Funds Corp. (“MIX Corp.”) in response to the federal government enacted legislation to eliminate the use of derivative forward agreements to re-characterize fully taxable income into capital gains for tax purposes.
“It’s important that we respond to last year’s Federal Budget announcement in a manner that is in the best interest of all investors in funds within the MIX Corp. With the elimination of forward contracts for income character conversion purposes, we are removing certain assets which are generating significant fully taxable income from MIX Corp. to the trust-equivalent funds in the best interest of the affected investors and to help ensure a strong, viable corporation for our investors, for years to come.” said Derek Saliba, AVP, mutual funds, Manulife.
Details on the proposed mergers can be found here.
Ceasing distribution of new securities
As of the close of business on July 30, the following funds will cease distribution of new securities: Manulife Global Opportunities Balanced Fund; Manulife Global Opportunities Class; Manulife International Value Equity Class; and Manulife Preferred Income Fund.
In addition, effective July 30, 2014, Manulife Mutual Funds will cease distribution of new securities for Manulife Tax-Managed Growth Fund. Current securityholders can continue to hold their units in Manulife Tax-Managed Growth Fund.
Upon these funds ceasing distribution of new securities, any ongoing purchases through pre-authorized chequing plans, Group Plan Purchases and RESP incentives will be directed to a money market fund managed by Manulife Mutual Funds, unless securityholders advise us otherwise.
Portfolio manager and investment strategy change
Effective on August 1, Terry Carr, senior managing director & head of Canadian fixed income, Manulife Asset Management, will become the lead portfolio manager for the Manulife Balanced Income Private Trust, replacing the Portfolio Solutions Group.
Carr is Head of Canadian fixed income for Manulife Asset Management. He is responsible for the Canadian Fixed Income and Money Market teams. He is also a senior member of the Manulife Asset Management Investment Committee. At the same time, the investment strategy of the Manulife Balanced Income Private Trust will be changed to enable Carr to use an actively managed strategy that tactically allocates amongst different Canadian and/or global fixed income and equity asset classes.
Fund name change
Effective August 1, Manulife Global Dividend Income Fund will have its name changed to Manulife Global All Cap Focused Fund. This name change more closely reflects the investment strategy of the fund.
Risk rating changes
Effective August 1, the risk ratings of Manulife Global Real Estate Fund and Manulife Global Real Estate Class are changing from “high” to “medium to high”.
The change in risk rating will be reflected in this year’s Simplified Prospectus of each fund which will be filed with Canadian Securities Regulators on August 1.
No changes have been made to the investment objectives, strategies or management of these funds.