iA Clarington Investments announces fee reductions, Active ETF Series and other changes
TORONTO – October 11, 2018 /CNW/ - IA Clarington Investments Inc. (“iA Clarington” or “the Firm” ) is pleased to announce four initiatives aimed at delivering enhanced value and a simpler, more streamlined experience for investors and financial advisors:
- Fee reductions
- Active ETF Series
- A simplified fee-based purchase option
- 10 fund mergers
"With these enhancements, our goal is to increase return potential for investors and add greater flexibility and simplicity to the way they and their advisors access our lineup of high-conviction, actively managed solutions,” said Eric Frape, Senior Vice-President, Product & Investments, iA Clarington.
Effective October 22, iA Clarington is lowering fees on 33 funds across a wide range of asset classes. “These fee reductions demonstrate our commitment to providing investors with cost-effective access to actively managed strategies. The vast majority of price-reduced series have lower fees than their peer group averages, and more than 50% have fees in the top quartile. This translates into very attractive entry points for investors seeking actively managed solutions for major asset class exposures,” said Frape. Examples include:
|Asset class||Fund||Series F reduced MER (est.)1|
|Canadian fixed income||IA Clarington Bond Fund||0.52%|
|Canadian equity||IA Clarington Canadian Leaders Class||0.76%|
|U.S. equity||IA Clarington U.S. Dividend Growth Fund||0.79%|
|Global equity||IA Clarington Global Value Fund||0.83%|
IA Clarington Managed Portfolios, the Firm’s five-portfolio suite of all-in-one investment solutions, will also be available at reduced MERs, starting at 0.94% for IA Clarington Conservative Portfolio (Series F).1
For complete details on fee reductions, please visit iaclarington.com/reducedfees
Active ETF Series
iA Clarington will be launching Active ETF Series for three of its fixed-income funds. Active ETF Series will provide access to the same strategies, exposures and portfolio managers as the Firm’s mutual fund series, but in an investment that trades like a stock. The fee structure of Active ETF Series is the same as Series F, the Funds’ fee-based series.
“Market volatility and the low, but rising, interest rate environment have made the fixed-income market more complex, increasing demand for actively managed strategies. Our new Active ETF Series provide convenient access to three unique mandates for advisors and self-directed investors who prefer using an exchange-traded vehicle,” said Frape.
Active ETF Series will be available for the iA Clarington funds set out below. The Toronto Stock Exchange has conditionally approved the listing of these ETF Series securities. The listing is subject to iA Clarington fulfilling all of the requirements of the exchange.
IA Clarington Core Plus Bond Fund (TSX: ICPB), managed by Jeff Sujitno, seeks to provide income and the potential for long-term capital growth, while preserving capital and mitigating the effects of interest rate fluctuations. The fund invests in government bonds, investment grade bonds and high-yield bonds, as well as other income-producing securities, including asset-backed securities and senior floating rate loans. The management fee for the ETF series is 0.50%.2
IA Clarington Global Bond Fund (TSX: IGLB), sub-advised by PineBridge Investments LLC (“PineBridge”), seeks to provide income and the potential for some capital appreciation by investing in fixed-income securities around the world. The management fee for the ETF series is 0.70%.2
IA Clarington Emerging Markets Bond Fund (TSX: IEMB), also sub-advised by PineBridge, seeks to provide income and the potential for long-term capital appreciation by investing in emerging market debt securities. The management fee for the ETF series is 0.80%. 2
Visit iaclarington.com/ETF to learn more about Active ETF Series.
Streamlined fee-based offering
Effective October 22, Series EF – iA Clarington’s Elite Series fee-based purchase option – will be closed to new investors; for these investors, Series F will serve as the Firm’s single fee-based purchase option. With this change, auto-switches into a separate, high-net-worth series will no longer be necessary. This streamlined offering provides investors and advisors in a fee-based arrangement with more straightforward access to iA Clarington’s actively managed solutions.
For funds that will have a Series F fee reduction, the new fee will be the same or lower than the current Series EF fee. Current investors in Series EF can continue to make purchases and any systematic programs will continue. In addition, for funds that will have a Series F fee reduction, iA Clarington intends to merge Series EF into Series F in March 2019, subject to necessary approvals.
Proposed fund mergers
To make its product shelf simpler and easier to navigate, iA Clarington has proposed the following fund mergers, subject to regulatory and other approvals:
|Terminating Fund||Continuing Fund|
|IA Clarington Canadian Growth Class||IA Clarington Canadian Leaders Class|
|IA Clarington Sarbit Activist Opportunities Class||IA Clarington Sarbit U.S. Equity Class (Unhedged)|
|IA Clarington Short-Term Bond Fund||IA Clarington Core Plus Bond Fund|
|IA Clarington Short-Term Income Class||IA Clarington Money Market Fund|
|IA Clarington Strategic Corporate Bond Class||IA Clarington Strategic Corporate Bond Fund|
|IA Clarington Strategic Income Class||IA Clarington Strategic Income Fund|
|IA Clarington Tactical Bond Class||IA Clarington Core Plus Bond Fund|
|IA Clarington Tactical Bond Fund||IA Clarington Core Plus Bond Fund|
|IA Clarington Tactical Income Class||IA Clarington Strategic Income Fund|
|IA Clarington Tactical Income Fund||IA Clarington Strategic Income Fund|
iA Clarington is proposing an effective date of March 22, 2019 for these mergers. Effective October 22, 2018, the proposed Terminating Funds will be closed to new investors.
Of the 10 proposed mergers, nine will require a unitholder/shareholder vote. For mergers requiring investor approval, unitholders/shareholders will receive a mailing in mid-February with instructions on how to vote.
Subject to regulatory approval of the proposed mergers, IA Clarington Tactical Income GIF will be merged into IA Clarington Strategic Income GIF, and IA Clarington Tactical Bond GIF will be renamed IA Clarington Core Plus Bond GIF.
For more information on these changes, please visit iaclarington.com/mergers
About IA Clarington Investments Inc.
A subsidiary of Industrial Alliance Insurance and Financial Services Inc. – Canada’s fourth-largest life and health insurance company – iA Clarington offers a wide range of investment products, including actively managed mutual funds, managed portfolio solutions, Active ETF Series and socially responsible investments. As of September 30, 2018, iA Clarington has more than $15 billion in assets under management. For more information, please visit iaclarington.com.
1The reduced MER (est.) is estimated based on the reduced management fee and administration fee effective October 22, 2018 plus IRC and Director fees (where applicable). The MER (est.) also includes a portion of underlying funds’ MER (mutual funds & ETFs), where applicable, based on the asset mix of the Fund on March 31, 2018 and a blended HST rate for the year ended March 31, 2018. The HST rate and asset mix of the Fund will change. The new fees will not be fully reflected in the fund’s published MER until the semi-annual MER for the period ended September 30, 2019. 2Management fees do not include administration fees and applicable taxes. Commissions, trailing commissions, management fees, brokerage fees and expenses all may be associated with mutual fund investments, including investments in exchange-traded series of mutual funds. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. The iA Clarington Funds are managed by IA Clarington Investments Inc. iA Clarington and the iA Clarington logo are trademarks of Industrial Alliance Insurance and Financial Services Inc. and are used under license.