Briefly:

(January 16, 2004) The Alternative Investment Management Association of Canada (AIMA Canada) has named Lynda Briant as general manager. Briant brings experience from her past senior positions at Dow Jones Indexes, Toronto Stock Exchange and State Street Global Advisors.

AIMA Canada chair Jim McGovern says Briant’s appointment “reflects the very positive industry response to AIMA Canada and the rapid growth of the organization across the country.”

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BoC appoints advisor

(January 16, 2004) The Bank of Canada has appointed Pierre Godin, the acting chair of the Quebec securities commission, to the position of advisor for an 18-month term, beginning mid-March.

Godin has also served as special adviser to the chair and chief of staff for the CEO of the Caisse de dépôt et placement.

The Bank says Godin’s experience in the regulatory environment will be helpful as the Bank of Canada works to improve the efficiency of capital markets, tackling issues such as “investor confidence, codes of conduct, transparency and regulation of markets.”

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National Life adds income trusts to seg fund family

(January 15, 2004) National Life today announced the launch of two income trusts to its family of segregated funds.

The National Life Income Conglomerated Fund will invest in the petroleum, gas, gas pipeline, public service and real estate sectors, as well as in common stocks and fixed income. The fund is covered by a 100% upon death or maturity guarantee.

The National Life Real Estate Income Fund will invest primarily in the real estate sector, with some exposure to short-term fixed income government securities. It comes with a 75% guarantee.

“The key benefit to investing in segregated income funds rather than individual trusts is that investors have the added advantage of diversifying their holdings across many different trusts,” says Brenda Moore, National Life’s director of marketing for retirement and investment products. Both funds will be managed by Industrial Alliance.

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Manulife launches market-growth GIC

(January 15, 2004) Manulife Investments today introduced a market-growth investment option for its GICs.

The new product offers a principal guarantee, a guaranteed annual return and an interest rate bonus linked to the performance of the Manulife Growth Asset Allocation Fund, Manulife says.

Available through advisors, the market-growth GIC requires a minimum $5,000 investment. Manulife says investors will receive a 2.8% annual return, along with a bonus reflecting half of any increase in the asset allocation fund.

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AGF acquires Ottawa-based HNW investment firm

(January 15, 2004) AGF Management is expanding its private client business, today announcing the acquisition of P.J. Doherty & Associates, an Ottawa-based investment counselling firm specializing in high net worth individuals and institutions.

Financial terms of the all-cash deal were not disclosed, but AGF says the acquisition will increase the assets of its private investment management business to $2.5 billion.

“This is an ideal combination that reinforces AGF’s vision to become a national leader in private investment management through strategic and organic growth,” said AGF president Blake Goldring.

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C.D. Howe calls for quarter-point interest rate reduction

(January 15, 2004) The C.D. Howe Institute says the Bank of Canada should lower its benchmark lending rate by 25 basis points to 2.5%.

Members of the economic think-tank’s Monetary Policy Council cited weaker than expected domestic demand and the rising Canadian dollar as reasons for the rate-cut recommendation.

The 12-member council includes several leading bank economists, including Tim O’Neill, Don Drummond, Warren Jestin and Craig Wright. The central bank makes its next interest rate announcement on Tuesday, January 20.

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Meritas to launch socially responsible fund of funds

(January 14, 2004) Meritas Financial, a socially responsible investment fund firm based in Cambridge, Ontario, today announced the launch of the Meritas Balanced Portfolio Fund, the first rebalancing fund of funds for SRI clients in Canada.

The new fund — expected to be available in early February pending regulatory approval — will invest in units of Meritas’s fund family: the Meritas Money Market Fund (5%), the Meritas Canadian Bond Fund (45%), the Meritas Jantzi Social Index Fund (26%), the Meritas U.S, Equity Fund (14%) and the Meritas International Equity Fund (10%).

“With a renewed emphasis on a portfolio approach to investing, we expect advisors and investors to be very excited by this fund launch,” Meritas said in a release sent to advisors. “The primary investment objective of the Meritas Balanced Portfolio Fund is to seek capital appreciation with an equal emphasis on current income.”

The RRSP-eligible fund will be managed by Meritas , along with sub-advisors State Street Global Advisors, MMA Capital Management, Genus Capital Management and Thornburg Investment Management.

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Victoria hosts second World Critical Illness conference

(January 14, 2004) Close to 1,000 insurance agents and financial advisors are expected in Victoria, B.C., this week for the second annual World Critical Illness insurance conference. This year’s event will feature nearly 40 speakers, including Dr. Marius Barnard, the South African heart surgeon who pioneered the concept of CI more than 20 years ago.

Other sessions will cover the future of CI in Canada, changes in the CI market around the world, prospecting tips, underwriting and taxation.

About 700 advisors attended last year’s conference in Vancouver. Advisor.ca will have extensive coverage of the three-day CI conference, which begins on Thursday, January 15.

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Canada Life sells U.S. subsidiary

(January 14, 2004) Canada Life today announced the sale of its U.S. group insurance business to North Carolina-based Jefferson-Pilot.

The business, currently operated from Atlanta, Georgia, represents about $340 million US in annual premiums in group life, disability and dental insurance. Financial terms of the sale were not released.

Canada Life is a subsidiary of Winnipeg-based Great-West Life.

“This sale will allow Great-West to continue to focus on its core healthcare and retirement services businesses, and to redirect freed-up capital back into these businesses,” said Great-West chief executive officer William McCallum in a statement.

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Ponzi schemes expected to be top U.S. investment scam in 2004

(January 14, 2004) U.S. state securities regulators expect Ponzi schemes to be the most prevalent and serious investment scam in the coming year. The North American Securities Administrators Association (NASAA) today released its annual survey of top scams, schemes and scandals.

Ponzi promoters promise high returns and use money from past investors to pay new investors. “Inevitably, the schemes collapse and the only people who consistently make money are the promoters who set the Ponzi in motion,” NASAA says.

Scams aimed specifically at seniors were number two on the list, followed by promissory notes, unscrupulous brokers and affinity fraud. Perhaps surprisingly, the recent wave of U.S. mutual fund scandals barely dented the top 10 list, finishing in ninth spot.

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Women more risk averse, but at risk

(January 12, 2004) When it comes to RRSP investing, women are far more risk averse than men, according to a poll by TD Waterhouse. Not only are women less likely to invest in equities, but they believe they will need less money for a comfortable retirement.

The poll found men thought they would need $623,000 to retire in comfort, while women believed they could get by on just $399,000.

“When you factor in longer life spans, rising costs of living, divorce rates, an aging population and strains on healthcare costs, it is clear that women are aiming far too low for retirement,” says Patricia Lovett-Reid, senior vice-president of TD Waterhouse Canada Inc. “In my view, $750,000 would be a more appropriate goal for both women and men.”

The poll also found 28% of men plan to base their RSP around a equity-based mutual fund, with 11% planning to make equities the core holding in the RRSP. Only 16% of women planned to make equity funds their largest single holding and 7% would put most of their money into stocks.

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Regulator experimenting with “plain language”

(January 12, 2004) In a break from the norm, the Canadian Securities Administrators (CSA) has published a proposed regulatory rule in simpler language in an effort to make it easier to read and understand.

The CSA calls National Instrument 81-107, Independent Review Committee for Mutual Funds, released last week, “a case study in plain language rule-making.”

“We believe securities regulation should be comprehensible to all market participants, from sophisticated securities professionals to investors,” the CSA says.

Plain language initiatives are also gaining popularity at the consumer level. A study released last year by the Investor Education Fund indicated that much of the financial information available to consumers presumes an awareness of investment choices.

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Desjardins launches funds

(January 12, 2004) Desjardins Financial Security has launched a new S&P 500-linked investment, called Dynamic Index, which offers investors protection against market downturns and allows them to redeem their funds in whole or in part on the yearly anniversary date.

“Dynamic Index guarantees value increases with market appreciation for the year and it does not drop even if the market sours because the valuation is not reset during any downturns,” says Michael Aziz, regional vice-president of saving product sales for Desjardins. “In effect, an investor gets a minimum 100% maturity guarantee of the initial deposit, over a seven-year term.”

Desjardins also announced the launch of the Classic Index Fund, which is similar to the Dynamic Index, but offers exposure to the EURO STOXX 50, the FTSE 100 and the Nikkei 225.

The company has also unveiled seven new segregated funds under its Millennia III Family, including three foreign equity funds, two Canadian equity, one fixed income and one balanced and asset allocation.

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(01/12/04)