Product roundup: Harvest banks on new low-volatility ETFs

HVOL will provide investors with access to a diversified Canadian equity portfolio seeking long-term capital appreciation with lower overall volatility. Meanwhile, HVOI will give investors access to the same strategy, along with a covered call strategy overlay that aims to deliver higher monthly cash distributions.

Their management fees are 0.35% and 0.65%, respectively.

“With the volatility in the market, [low volatility is] a very powerful investment factor,” said Chris Heakes, senior portfolio manager with Harvest. “We saw an opportunity to bring a new solution and a new approach into the space.”

Harvest’s portfolio management team will select 40 stocks for HVOL and HVOI based on a few screens: they must have low beta risk ratings, they must be large or mid-capitalization Canadian equities, and they must have low historical and potential volatility, Heakes said.

The stocks will be ranked and weighted based on their risk score and market capitalization. A maximum 4% weight will be applied to each holding, with the funds’ portfolios rebalanced semi-annually.

The funds’ holdings include stocks that are “very recognizable to Canadian investors” such as Royal Bank of Canada and CIBC, as well as “lower risk stocks” like Dollarama Inc., Waste Connections Inc., and some energy pipelines and railways, Heakes said.

“Sometimes what we find with low vol [investments] is they can do very well in one period, but then perhaps disappoint investors on the upside in other periods,” he explained.

“What we’re doing is trying to solve that by having a very effective defensive portfolio when markets are challenged, but also have a very exceptional upside return experience through market cycles as well.”

Speaking about HVOI specifically, Heakes said “low volatility has never been done with an option overlay for adding income, so we saw that there was room in the product space to add that solution.”

The low-volatility ETF theme has made a comeback in recent weeks. Data from National Bank Financial Inc. show that $829 million flowed into the funds in March, which researchers at the bank attributed to “bearish sentiment” rising on trade war concerns.

Heakes pointed out that low volatility investing approaches gained prominence after the 2008 Global Financial Crisis, when there were “significant market dropdowns” and questions around how to invest in equities without taking on high levels of risk.

“That’s where this really came from, but I think the really compelling thing about low vol is, yes, not only reduced risk, but it doesn’t mean you’re sacrificing on return, because these lower-risk stocks often have a very good return profile associated with them,” he said.

Manulife launches unified managed account program

Manulife Wealth Inc. has launched a unified managed account (UMA) program, Manulife Wealth and Asset Management said in a release on Monday.

The fee-based program consolidates multiple investment types into a single account, yielding one investment return summarized in one report, the release said. Investment advisors can create their own UMA models or choose among Manulife Wealth’s separately managed accounts and model portfolios, it said.

The UMA program uses Envestnet technology, and the Envestnet wealth management platform can provide client reporting, workflow management and model analytics.

RBC iShares launches ETF series of mutual fund

RBC iShares has launched a new ETF series of an existing mutual fund.

The RBC Global Large-Cap Equity Fund began trading on Cboe Canada under the ticker symbol RGLE on April 9, RBC Global Asset Management Inc. said in a release.

The fund seeks to provide investors with long-term capital growth by investing primarily in equity securities of companies operating in various countries around the world.

RGLE is managed by RBC GAM It has a 0.75% management fee.

This brings the total number of RBC ETFs listed on Cboe Canada to 15.

Global X announces fee rebates for certain ETFs

In the wake of the ongoing trade war, Global X Investments Canada Inc. (Global X) has announced rebates on the annual management fees on certain funds to incentivize investors to support Canadian businesses.

“Recently, it’s been a challenging period for Canada’s economy. That uncertainty has driven concerns about what’s ahead for markets,” said Chris McHaney, executive vice-president, investment management and strategy with Global X, in a release on April 9.

“By rebating our fees, we’re looking to do our part by supporting and facilitating opportunities to help Canadians invest in the businesses that keep our country moving,” he added.

In addition to applicable sales tax, the rebated ETFs are still subject to operating expenses, which are included in the management expense ratio, as well as trading costs, which are included in the trading expense ratio, the release noted.

The following funds are set to have a 0% annual management fee until the end of 2025:

• Global X Equal Weight Canadian Telecommunications Index ETF (TSX: RING)
• Global X Equal Weight Canadian Groceries & Staples Index ETF (RSX: MART)
• Global X Equal Weight Canadian Insurance Index ETF (TSX: SAFE)
• Global X Equal Weight Canadian Oil & Gas Index ETF (TSX: NRGY)
• Global X Equal Weight Canadian Pipelines Index ETF (TSX: PPLN)
• Global X Equal Weight Canadian Utilities Index ETF (TSX: UTIL)
• Global X S&P/TSX 60 Index ETF (TSX: CNDX)

The rebates took effect April 9.

Fidelity adds new portfolio managers to funds

Fidelity Investments Canada ULC (Fidelity) has added portfolio managers to certain funds, the firm announced in a release on April 11.

Joining Will Danoff, Nidhi Gupta and Matthew Drukker are now portfolio managers for the following funds:

• Fidelity Insights Class
• Fidelity Insights Currency Neutral Class
• Fidelity Insights Systematic Currency Hedged Fund
• Fidelity Insights Currency Neutral Multi-Asset Base Fund
• Fidelity Insights Investment Trust

Gupta and Drukker are now also portfolio managers for the following funds, joining Danoff, Sam Chamovitz and Morgen Peck:

• Fidelity Global Growth & Value Class
• Fidelity Global Growth & Value Currency Neutral Class
• Fidelity Global Growth & Value Investment Trust

Lastly, Thomas Williams has become a portfolio manager, working alongside existing portfolio manager Daniel Kelley, for the following funds:

• Fidelity Founders Class
• Fidelity Founders Currency Neutral Class
• Fidelity Founders Investment Trust

The investment objectives and strategies of the funds remain the same. More information is available here.

Manulife announces fund launches, fee reductions

Manulife Investment Management Limited (Manulife IM), a company of Manulife Wealth & Asset Management, has announced the launch of two mutual funds and some fund fee reductions.

The Manulife Global Core Equity Fund seeks to provide capital appreciation by investing primarily in other investment funds to gain exposure to global equities, while the Manulife Global Core Balanced Fund seeks to provide capital appreciation by giving investors exposure to global equities as well as fixed-income securities, a release on April 8 said.

The Manulife Global Core Equity Fund’s portfolio includes the following underlying funds:

• Manulife Global Equity Class, which is managed by Mawer Investment Management
• Manulife Climate Action Fund, which is managed by Manulife IM
• Manulife Canadian Equity Class, which is managed by Manulife IM
• Manulife U.S. Opportunities Fund, which is managed by Manulife IM

The Manulife Global Core Balanced Fund has the same underlying funds in the equity component of its portfolio as the Manulife Global Core Equity Fund. Its fixed-income component, on the other hand, includes the following underlying funds, which are both managed by Manulife IM:

• Manulife Alternative Opportunities Fund
• Manulife Core Plus Bond Fund

For both new funds, the advisor series/series T versions have a management fee of 1.72% and a trailer fee of 1.00%. The series F/series FT versions have a 0.72% management fee and no trailer fee.

Manulife IM is also reducing the management fees on some of its funds sometime on or around this Tuesday. The affected funds include:

• Manulife Fundamental Equity Fund
• Manulife Tactical Income Fund
• Manulife U.S. Opportunities Fund
• Manulife Covered Call U.S. Equity Fund
• Manulife Covered Call U.S. Equity Class

A full breakdown of the new management fees is available here.

CI GAM says fund termination, mergers complete

CI Global Asset Management (CI GAM) has terminated one fund and merged several others, with more mergers on the way, the firm announced in a release on April 7.

The CI Galaxy Metaverse Index ETF (TSX: CMVX) was terminated on April 4, the release said.

Meanwhile, CI GAM said the previously announced mergers of six mutual funds and two ETFs received securityholder approval at meetings in March. The mergers of four mutual funds and two ETFs are complete, and two mutual fund mergers are expected to happen on or around May 9.

A full breakdown of the fund changes is available here.