Toronto-based Fidelity Investments Canada ULC has announced changes to the names and investment objectives of Fidelity Income Trust Fund and Fidelity Monthly High Income Fund as a result of tax changes that will affect income trusts as of Jan. 1, 2011. Fidelity Income Trust Fund, which had been invested primarily in income trusts and other securities expected to distribute income, is now Fidelity Dividend Plus Fund. This new fund primarily invests in equity securities that pay or are expected to pay dividends and other securities that are expected to distribute income. Fidelity Monthly High Income Fund, which had invested in income trusts, fixed-income securities and other securities expected to generate income, is now Fidelity Income Allocation Fund. This fund invests, either directly or through investments in securities of other funds, primarily in investment-grade, fixed-income securities; higher-yielding, lower-quality, fixed-income securities; equity securities of companies that pay dividends; and other securities that are expected to distribute income.
New seg funds in Empire Life’s GMWB lineup
Kingston, Ont.-based Empire Life Insurance Co. has unveiled two new segregated funds available in Class Plus, its guaranteed minimum withdrawal benefit lineup within its Empire Class seg fund product. The new balanced funds combine an Empire Life flagship equity fund with core fixed-income exposure for diversification. Empire Life Dividend Balanced Fund is composed of 80% Empire Life Dividend Growth Fund and 20% Empire Life Bond Fund. Empire Life Elite Balanced Fund is composed of 80% Empire Life Elite Equity Fund and 20% Empire Life Bond Fund. Both of the new funds will be managed by the Empire Life investment team, led by Gaelen Morphet, chief investment officer, using a value-oriented, disciplined investment approach. This is the second enhancement to Class Plus this year. In January, Empire Life announced that Class Plus clients would receive the 5% annual income base bonus each year for life if no withdrawals are made that year, and that clients are eligible to receive their guaranteed lifetime withdrawal amount a year earlier, at age 65.
Advisor changes at TD Asset Management
Toronto-based TD Asset Management Inc. has made portfolio advisor changes for three of its funds. TDAM has assumed portfolio advisor responsibilities for TD Balanced Growth Fund, formerly advised by Toronto-based McLean Budden Ltd. TDAM managing directors John Smolinski and Les Grober now manage the fund. In addition, effective on or about Sept. 30, TDAM will assume portfolio-advisor responsibilities for TD Canadian Blue Chip Equity Fund from Montreal-based Jarislowsky Fraser Ltd. Michael O’Brien, TDAM vice president and director, will manage the fund. TD International Equity Growth Fund will also have a portfolio advisor change on or around Sept. 30: Boston-based Old Mutual (U.S.) Holdings Inc. will acquire the international equity portfolio-management team for the fund from Atlanta-based Invesco Advisers Inc., currently the portfolio advisor for the fund. Under the proposed transaction, the portfolio-management team will form a new affiliate called Echo Point Investment Management LLC and will be based in West Conshohocken, Pa. It is expected that the fund’s portfolio-management team, led by Hans van den Berg and David Sugimoto, will remain the same. There will be no change to the fund’s investment objectives or strategies.
Horizons unveils new corporate-bond ETF
Toronto-based AlphaPro Management Inc., manager of Horizons AlphaPro exchange-traded funds, has introduced its first actively managed corporate-bond ETF, Horizons AlphaPro Corporate Bond ETF. This ETF will seek long-term, moderate capital growth and generate high income, and will invest primarily in a portfolio of debt securities of Canadian and U.S. companies, directly or through investments in securities of other investment funds, including other ETFs. The subadvisor of Horizons AlphaPro Corporate Bond ETF, Montreal-based Natcan Investment Management Inc., expects that the initial portfolio will be composed of securities issued by approximately 100 to 150 corporate-bond issuers. Natcan’s fixed-income team will employ an active investment strategy, which is expected to deliver better risk-adjusted returns than the DEX all-corporate bond index. Natcan’s active strategy involves the use of macroeconomic, fundamental and technical credit research to select the portfolio’s companies, together with analysis of the issuing companies’ industry and growth prospects. Horizons AlphaPro Corporate Bond ETF can invest in U.S. dollar-denominated securities but, at all times, it will, to the best of its ability, seek to hedge its non-Canadian-dollar currency exposure to the C$. Horizons has also launched Horizons AlphaPro S&P/TSX 60 Equal Weight Index ETF, which tracks the recently created S&P/TSX 60 equal weight index. This ETF will seek to replicate the performance of the equal weight index, net of expenses. The equal weight index and the S&P/TSX 60 Index are composed of 60 of the largest (by market capitalization) and most liquid securities listed on the TSX.
Compiled by Clare O’Hara (cohara@investmentexecutive.com).