Product roundup: Vanguard rolls out balanced mutual funds

“One of the main [pieces of] feedback we received over the years was, ‘Not all advisors use ETFs, some advisors still prefer mutual funds. Give us more choice,’” said Sal D’Angelo, head of product with Vanguard Canada in Toronto, in an interview.

“So, launching [balanced funds] in a mutual fund format was about expanding access to different segments of advisors and giving them more choice to allow them to use the vehicle that works best for their practice.”

Another driver for the funds’ launch, he said, was to offer products in the balanced fund category with low fees — all four of the new Vanguard funds have a management fee of 0.22% and an expected management expense ratio (MER) of 0.40%. This is well below the 1.47% average MER for long-term mutual funds that the Conference Board of Canada and Investment Funds Institute of Canada reported for 2023.

“Whether it’s active or passive, costs do matter. Costs compound over time, right?” D’Angelo said.

The new Vanguard funds offer four different risk profiles to choose from, ranging from high risk to low risk depending on their asset allocations.

Here is a breakdown of the new funds:

• Vanguard All-Equity ETF Portfolio Fund (MF Code: VIC 1000), which has a strategic allocation of 100% equities.
• Vanguard Growth ETF Portfolio Fund (MF Code: VIC8020) invests in equity and fixed-income securities, with a strategic allocation of 80% equities and 20% fixed income.
• Vanguard Balanced ETF Portfolio Fund (MF Code: VIC 6040) invests in equity and fixed-income securities, with a strategic allocation of 60% equities and 40% fixed income.
• Vanguard Conservative ETF Portfolio Fund (MF Code: VIC 4060) invests in equity and fixed-income securities, with a strategic allocation of 40% equities and 60% fixed income.

The funds have globally diversified portfolios and advisors can use them as a core position in their models for clients, D’Angelo said. He noted that such balanced funds are easier for advisors to work with, especially as they navigate regulation changes such as client-focused reforms and focus more on topics like tax and estate planning with their clients than selecting investments for them.

“It’s about giving them the same portfolio in different risk solutions so they can match their clients’ suitability needs. And it keeps it easy for them, right?” D’Angelo said.

“Maybe historically, advisors added value by being a stock picker. That has evolved, and the next evolution is really focusing on more of these wealth management components.”

Purpose expands its ETF lineup

Purpose Investments Inc. has expanded its ETF lineup, with seven new ETFs listed on Cboe Canada.

Listed on the exchange Thursday, the new funds are part of the company’s Yield Shares Suite, which is “designed to provide investors with the long-term growth potential and enhanced monthly yield” from stocks of major companies while employing a covered call strategy, a release said.

The new funds include:

• Costco (COST) Yield Shares Purpose ETF (Cboe: YCST), which invests in Costco Wholesale Corp.
• Palantir (PLTR) Yield Shares Purpose ETF (Cboe: YPLT), which invests in Palantir Technologies Inc.
• UnitedHealth (UNH) Yield Shares Purpose ETF (Cboe: YUNH), which invests in UnitedHealth Group Inc.
• Coinbase (COIN) Yield Shares Purpose ETF (Cboe: YCON), which invests in Coinbase Global, Inc.
• Netflix (NFLX) Yield Shares Purpose ETF (Cboe: YNET), which invests in Netflix
• Broadcom (AVGO) Yield Shares Purpose ETF (Cboe: YAVG), which invests in Broadcom Inc.
• Tech Innovators Yield Shares Purpose ETF (Cboe: YMAG), which invests in Broadcom Inc., Alphabet Inc., Tesla, Inc., Meta Platforms, Inc., Microsoft Corp., Amazon.com, Inc., Apple Inc., and Nvidia Corp.

The funds all have a 0.4% management fee.

Preqin updates its private capital indices

Preqin has introduced five new private capital indices and updated its existing indices to provide investors with enhanced private market data that can inform their decision making, the alternative assets data provider announced on Tuesday.

In a release, the firm said it updated its private capital indices methodology, which resulted in a “one-off refresh of all historical index data points.”

It also added five new private capital indices covering private debt, real estate and infrastructure. They include:

• Preqin Global Private Debt – Direct Lending (All) CE Index
• Preqin Global Real Estate – Core Plus CE Index
• Preqin Global Infrastructure – Core CE Index
• Preqin Global Infrastructure – Core Plus CE Index
• Preqin Global Infrastructure – Value Added CE Index

This brings Preqin’s total number of private capital indices to 50.

The changes come after a Preqin study found that 25–30% of investors use private market benchmarks to inform their private market investments, while a majority use a public index.

The firm said its methodology enhancements help address transparency gaps and “establish true and uniform benchmarks to ensure market participants have similar rules of engagement and measurements of success” to those in public markets. It added that moving toward setting standardized performance measures would shift the private markets closer to the public markets’ practices and conventions.

“Even sophisticated investors encounter difficulties when it comes to accessing and interpreting private market data, often resorting to public benchmarks. This is because there is a lack of suitable alternatives,” Preqin said.

The firm hopes to bridge this gap, especially as its own research indicates that the alternatives industry is on course to expand by almost 80% and set to exceed US$30 trillion in global assets under management by 2030, up from US$16.8 trillion at the end of 2023.

“[A]s private markets’ investor base continues to expand, accessing trustworthy data remains a challenge for both investors and fund managers,” Preqin said.

The data provider’s private capital indices track the quarterly performance of more than 14,000 private capital closed-end funds globally. They are updated every 90 days after quarter-end and include preliminary quarterly data.

Preqin said it extracts performance data from four channels: fund managers’ quarterly reports to investors, Freedom of Information Act, voluntary data contributions and public data. Its data and research teams also source, verify and validate performance data daily.

Franklin Templeton announces fund changes

Franklin Templeton Canada announced on Wednesday a series of fee reductions, fee waivers and distribution frequency changes for its investment funds.

The firm announced management and administration fee reductions of up to 35 basis points for various series of the Franklin ClearBridge Canadian Small Cap Fund. A breakdown of the fee changes, set to take effect March 1, is available here.

At the same time, the firm said the management fees of the Franklin International Low Volatility High Dividend Index ETF (TSX: FLVI) and Franklin U.S. Low Volatility High Dividend Index ETF (TSX: FLVU) will be waived by 15 basis points until June 30, 2026. Accordingly, the funds’ management fees will be 0.25% and 0.12%, respectively.

In addition, the distribution frequency for the Franklin International Low Volatility High Dividend Index ETF (TSX: FLVI) will change from monthly to quarterly. Meanwhile, the distribution frequency for the A, F, O, and ETF series of the Franklin Core ETF Portfolio (TSX: CBL), Franklin Conservative Income ETF Portfolio (TSX: CNV), Franklin All-Equity ETF Portfolio (TSX: EQY) and Franklin Growth ETF Portfolio (TSX: GRO) will change from annual to quarterly. These changes are set to take effect March 31.

Leith Wheeler to terminate mutual fund

Leith Wheeler Investment Counsel Ltd. plans to terminate the Leith Wheeler High Yield Bond Fund on or about April 25, the firm announced on Tuesday.

The fund will also no longer accept additional purchases.

Leith Wheeler is encouraging unitholders of the fund to contact their investment professional to discuss the termination and their investment options.

A notice will be sent to each unitholder at least 60 days prior to termination.

IG expands its SMA offerings

IG Wealth Management has expanded its separately managed account (SMA) offerings with six new mandates to provide clients with broader exposure to Canadian and international markets, the Winnipeg-based firm announced on Tuesday.

The six new investment mandates are:

• Capital Group Global Developed Equity
• Capital Group International Developed Equity
• Franklin ClearBridge Dividend Income
• Guardian Capital Global Dividend
• Manulife Canadian Core Equity
• Manulife North American Dividend Income

Four new asset managers have been added to IG’s Azure Managed Investments roster to manage these mandates. They include Capital Group, Franklin Templeton Investments, Guardian Capital Group and Manulife Investment Management.

Desjardins, CIBC make mutual fund changes

Desjardins Investments Inc. has made portfolio management and investment strategy changes to two of its mutual funds.

The Desjardins Global Corporate Bond Fund and the Desjardin Sustainable Global Corporate Bond Fund will soon be managed by Amundi Canada Inc. and Amundi (UK) Ltd., Desjardins announced on Monday.

Also, the new fund sub-managers will use “a dynamic allocation between macroeconomic top-down and bottom-up fundamentals based on identified credit market risk and specific issuer risk” in portfolio construction, a release said.

However, Desjardins noted that the fundamental investment objective and the risk rating of the funds will remain unchanged.

The changes are slated to take effect on or around March 26.

CIBC Asset Management (CAM), meanwhile, has announced several changes to its mutual funds, including portfolio management changes, fund name changes and management fee reductions.

In a release, it said that around mid-March, portfolio management responsibilities for the CIBC Emerging Markets Fund, Renaissance Emerging Markets Fund, CIBC Emerging Markets Equity Private Pool and Imperial Emerging Economics Pool will be assumed or reallocated to Mackenzie Financial Corporation.

Portfolio management responsibilities for the Renaissance Global Bond Fund will be assumed or reallocated to CIBC Asset Management Inc. around mid-April.

And the portfolio management responsibilities for the CIBC Global Bond Private Pool and Imperial International Bond Pool will be assumed or reallocated to CIBC Asset Management Inc. and sub-advisor PIMCO Canada Corp. around mid-April.

CAM further announced multiple mutual fund management fee reductions, which will also take effect around mid-April. A breakdown of the fee changes is available here.

As well, around the beginning of May, the Renaissance Global Science & Technology Fund will be renamed Renaissance Global Innovation Fund, while the CIBC Global Technology Fund will be renamed to the CIBC Technology Innovation Fund.

CIBC lists six new CDRs after delisting 10 others

CIBC has listed six new Canadian depositary receipts (CDRs) and delisted 10 others on Cboe Canada.

Announced Wednesday, the new CDRs are Canadian-dollar-hedged and invest in well-known Dutch and Swiss companies. They include:

• ASML CDR
• ING CDR
• Roche CDR
• Nestlé CDR
• Novartis CDR
• UBS CDR

The new listings come days after the bank said it was delisting the following 10 Canadian-dollar-hedged CDRs from Cboe:

• Advanced Micro Devices CDR
• Alphabet CDR
• Amazon.com CDR
• Apple CDR
• Berkshire Hathaway CDR
• Costco CDR
• Meta CDR
• Microsoft CDR
• Nvidia CDR
• Tesla CDR

In a Feb. 11 release, the bank said the CDRs would continue to be listed and traded on the Toronto Stock Exchange.

Asked for the reasoning behind the delistings, Elliot Scherer, managing director and global head of the wealth solutions group with CIBC Global Markets, said in a statement: “At inception, [CDRs] were initially listed exclusively with Cboe Canada, and our platform has since grown to 80 CDRs and over [$8.5 billion] in [assets under management]. As we continue to evolve our growing platform, we are looking to leverage the strengths of both these great Canadian stock exchanges — Cboe Canada and the Toronto Stock Exchange — and further expand our partnerships based on investor needs.”

This story has been corrected. The new Vanguard funds have an expected MER of 0.4%.