Briefly:

(January 9, 2004) Economic growth in the fourth quarter of 2003 likely will not meet the Bank of Canada’s expectations, says deputy governor David Longworth.

The central bank had predicted Q4 growth well above 4%. But Longworth says data received up to the end up of December suggests that figure will be “somewhat lower than expected,” though still around the 4% mark.

The Bank of Canada makes its next interest rate announcement on January 20. Economists anticipate a slight reduction cut in the benchmark rate, currently at 2.75%.

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FCAC updates credit card report

(January 8, 2004) Financial Consumer Agency of Canada (FCAC) has released an updated version of its Credit Cards And You report, saying inquiries about credit cards are the primary reason consumers contact the agency.

“We’ve revised our report to make shopping around and understanding credit cards easier,” says FCAC commissioner Bill Knight. “We tell you what the service charges and interest rates are at all the major financial institutions so you can compare for yourself.”

The report compares the key features of 170 different credit cards available in Canada and includes a worksheet consumers can use to determine the card best suited to their needs. The report is available online at the FCAC Web site.

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Western cities top list for growth

(January 8, 2004) Western economies are set to record the highest economic growth rates for 2004, according to a report from the Conference Board of Canada. The report cites Regina, Calgary and Edmonton as the leaders of the pack, with five of the top seven economies found west of Ontario.

“Calgary and Edmonton continue to benefit from healthy activity in the energy sector and high levels of domestic demand,” says Mario Lefebvre, director of metropolitan outlook service. “The services and construction sectors in both Alberta cities are performing well, thanks to strong population growth.”

The report says Regina’s economy will grow by 5.1%, following a drop in real GDP in 2003. Calgary and Edmonton are predicted to post growth rates of 4.4% and 4.1% respectively.

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Rockwater names new COO

(January 8, 2004) Rockwater Capital Corporation has named Stuart Raftus as chief operating officer of both Rockwater and First Associates, replacing Bill Fulton who has announced his resignation. Raftus will assume the role on January 22, the effective date of Fulton’s resignation.

“Stuart’s expanded role reflects the significant responsibilities he carries in building the firm’s wealth management and asset management businesses,” said Bill Packham, president and CEO of Rockwater. “We want to congratulate Stuart on his expanded role and wish Bill all the very best in his future endeavours.”

Raftus was already the president of First Associates Investments.

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Dundee taps Kagan to lead advisor network

(January 7, 2004) Dundee Wealth Management has hired former CIBC Wood Gundy executive Bruce Kagan to head its new expanded financial advisor network. Dundee took over Cartier Partners Financial Group last year, adding more than 3,000 advisors in the process.

Kagan — who begins next week as executive vice-president and head of wealth management at Dundee — started his career an advisor, moving on to branch manager at Midland Walwyn and Merrill Lynch. At CIBC Wood Gundy, he was head of high net worth services and head of professional training and development.

“Bruce has a track record of success as a financial advisor and as a manager, and we are very excited about Bruce joining Dundee as we move forward as Canada’s largest financial advisory network,” said Dundee Wealth Management vice-president Don Charter in an e-mail to staff announcing the appointment.

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CanDeal offers online provincial bond market

(January 7, 2004) CanDeal has rolled out its new online provincial bond trading platform, offering institutional investors best price transparency for provincial bond issues.

“CanDeal volumes have grown rapidly over the past year and now exceed $50 billion as measured by one side of cash securities transactions,” said Jayson Horner, president and CEO of CanDeal.ca Inc. “We look forward to continued growth in terms of volume and additional buy side and sell side participants as we continue to expand our dealing products, functionality and our STP capabilities.”

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RoyNat Capital launches new LSIF

(January 7, 2004) RoyNat Capital and Best Capital have announced they will launch a new labour-sponsored venture fund called the RoyNat Canadian Diversified Fund.

“The fund provides a new category in the labour-sponsored venture fund that offers investors an exceptional opportunity to further diversify their portfolios by sector, geography and size,” said John Richardson, president and CEO of Best Capital Management Ltd.

The new fund will invest in debt and debt-like securities of companies in traditional sectors such as manufacturing and consumer products, as well as taking private equity stakes in technology companies.

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Arrow launches new series of notes

(January 7, 2004) Arrow Hedge Partners has launched Arrow Multi-Strategy Notes, Series 3, which will be linked to Arrow Multi-Strategy Hedge Fund with BNP Paribas guaranteeing the principal.

“Investors will have the assurance of guaranteed principal repayment, the benefit of consistent return potential through a fully diversified fund of hedge funds, and comprehensive risk management from an industry leader. All with a low minimum investment of $5,000 that is tax efficient and fully RRSP eligible,” says Jim McGovern managing director and CEO of Arrow Hedge Partners.

As the name suggests, the Arrow Multi-Strategy Hedge Fund uses a variety of hedging strategies including: “long/short equity, equity market neutral, high-yield hedge, risk arbitrage, convertible arbitrage, fixed income arbitrage, distressed securities, managed futures and global macro.”

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Algonquin launches power LSIF

(January 7, 2004) The Algonquin Power Group has announced the launch of the Algonquin Power Venture Fund, a labour-sponsored fund which will invest in the Ontario electricity marketplace.

“The Algonquin Power Venture Fund represents the ideal marriage of the low-risk and stable cash flows from independent power projects with the highly attractive tax advantages provided through the labour-sponsored investment fund structure,” says Jeff Norman, a senior manager of the fund.

The fund will share management with the Algonquin Power Income Fund and focus on debt instruments to provide sustainable cash flows.

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Manulife index says investors confident

(January 7, 2004) Despite the trials and tribulations that have plagued the markets over the past few years, Canadian investors have remained positive, according to the polls by Manulife Financial.

“Generally, Canadians continue to show strong resolve, even in the most difficult times, and now we’re seeing renewed strength amid a more stable investment climate,” said Bruce Gordon, Manulife Financial executive vice-president and general manager of Canadian operations.

The Manulife Investor Sentiment Index survey also says that Canadians are a fairly conservative bunch when it comes to their investments.

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2003 ends strongly for fund industry

(January 6, 2004) The mutual fund industry enjoyed its best month of 2003 in December, with net sales of approximately $900 million, according to IFIC’s preliminary estimates.

Net new sales for December are estimated to be between $700 million and $1.1 billion, IFIC says.

“The industry has garnered sales of almost $2.1 billion in the last three months,” says IFIC president Tom Hockin. “This month [December] will probably be the highest net sales of the year.”

“The recent market rally has bolstered investor confidence, and justifiably so,” added David Feather, president of Mackenzie Financial Services. “The strength of the markets in 2003 and the resulting growth in the value of investments confirms the importance of a disciplined long-term approach. Strong fund sales are an indication that Canadians are confident and ready to participate more fully in the market.”

Industry assets increased 3.5% in December, to around $437 billion, the highest level since March 2002.

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AIMR introduces fee disclosure requirements

(January 6, 2004) Investment firms that report their results to clients will soon be required to add fee disclosure to that reporting, says the Association for Investment Management and Research (AIMR).

The new fee disclosure provisions have been approved by the board of governors of AIMR, sponsor of the Global Investment Performance Standards (GIPS) initiative.

Under GIPS, which is not mandatory for investment firms to adopt, returns are calculated and reported using a standardized approach, allowing investors to compare returns at other GIPS-compliant companies.

The new GIPS fee provisions will standardize the calculation and presentation of the impact fees have on returns, AIMR says. “The consistent treatment of fees allows for greater comparability of returns and increased transparency to investors.”

The new rules take effect January 1, 2005, but AIMR is encouraging firms to adopt them as soon as possible.

AIMR, with 68,000 members worldwide, administers the chartered financial analyst designation.

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AGF appoints new managers, expands Harmony lineup

(January 6, 2004) AGF has appointed new managers for three of its pooled Harmony funds and is launching nine new Harmony portfolios, funds of funds which invest in existing Harmony products.

Chicago-based William Blair & Company will manage the U.S. portion of the Harmony Americas Small Cap Equity Pool, Enhanced Investment Technologies, headquartered in Florida, will manage the growth portion of the Harmony U.S. Equity Pool while Toronto’s Foyston, Gordon & Payne takes over the value portion of the Harmony Canadian Equity Pool.

The nine Harmony portfolios, still subject to regulatory approval, were designed by Mercer Investment Consulting.

“Investment advisors can align their clients with one of nine Harmony portfolios, carefully constructed from various combinations of underlying investment pools,” AGF said in a news release issued today.

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Maritime Life launches new term deposit account

(January 6, 2004) Maritime Life has introduced a new term deposit account that encompasses features commonly associated with segregated funds, such as principal protection.

The performance-linked account is available as a five-year RRSP investment. As well as a guarantee on the initial investment, there is no fixed cap on potential returns, the Halifax-based insurer says. The account also includes investment in four Maritime Life segregated funds.

“This is the ideal investment vehicle for those individuals interested in the growth potential traditionally associated with stocks and bonds, but who do not want their initial investment exposed to any risk,” says Maritime Life’s president of retail sales, Daniel Dessureault.

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Canadians see rosy 2004

(January 5, 2004) Canadians are more optimistic for 2004 than they were in 2003, with more than half expecting positive returns on their RRSP accounts. According to an annual survey by RBC, 54% expect their retirement savings to grow in 2004, up from 39% in 2003.

The average expected rate of return is 6.3%, but 45% of the optimists expect to top 10%.

“It’s encouraging to see that expectations of rate of return are in line with what the market can realistically deliver,” said Brenda Vince, president of RBC Asset Management. “In our view, North American equities are trading at fair value; so the fact that Canadians are willing to commit more to equities is good news.”

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Advocis changes fee structure to recognize designation holders

(January 5, 2004) Advocis members who hold a CFP or CLU designation will get a discount on their 2004 fees. The country’s largest association of financial advisors has set membership fees at $495 this year. But Advocis members entitled to use either the CFP or CLU mark will have a $225 credit applied to that fee.

The new pricing structure “rightfully recognizes” members who have earned either a CFP or a CLU designation, Advocis says on its Web site.

Advocis says the change also recognizes that professional services — such as promotion of the designation and codes of conduct — are provided by the two designation-granting bodies: the Financial Planners Standards Council and the CLU Institute, which also charge an annual licensing fee.

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FPSC releases fall exam results

(January 5, 2004) Six hundred and fifty-one financial planners have passed the fall sitting of the CFP exam. The Financial Planners Standards Council today released the results of its November 22, 2003, exam, written by 1,220 individuals.

The pass rate was 53%, slightly lower than the June exam, when 57% passed. Of those writing for the first time, 63% were successful. The number of people writing fell 17% from November 2002, when 1,419 CFP students took the test. A record 1,497 individuals sat the test in June 2000.

The six-hour financial planning exam is held twice a year in both official languages. The next CFP exam is set for Saturday, June 5, 2004. Nearly 16,000 Canadian planners now hold the CFP mark.

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(01/05/04)