Briefly:

(December 17, 2004) BluMont Capital has announced it will close the BluMont Hirsch Performance Fund to new investors on March 31, 2005 or when the fund reaches $150 million in assets, whichever comes first. Existing investors will be able to continue funding their position until the fund reaches its cap of $200 million.

“In a period when declining investment returns have made investors more fee-sensitive, this unique fund structure resonates extremely well with both advisors and their clients,” said Toreigh Stuart, CEO of BluMont Capital. “We have had considerable interest recently in our BluMont Hirsch Performance Fund and we expect this product to reach investment capacity by the end of the first quarter of 2005.”

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Empire Financial extends commission bonus

(December 17, 2004) Empire Financial Group has extended a promotional 5% increase in first-year commissions through to January 31, 2005 on its new Solution series of term insurance products.

“We listened to what advisors were telling us their clients wanted; an inexpensive insurance solution that could evolve with their changing needs,” says Owen Rhoden, Manager of Individual Life and Health Marketing at Empire. “The effect of industry consolidation on product availability means that more advisors are looking beyond their usual slate of offerings for fresher, better products. The market was definitely ready for Empire’s Solution series of term insurance products.”

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Scotia cutting some MERs, raising others

(December 17, 2004) Scotia Securities has announced changes to the MER on 14 of its funds, after reviewing the fees associated with 48 of its offerings.

“These changes will ensure the funds’ management fees remain competitive and will better align our mutual funds offering with the industry overall,” said Karen Fisher, president and CEO, Scotia Securities Inc. “We are pleased that the management fees for the Partners Portfolios funds — currently our most popular, well-diversified investment solutions will decrease. Going forward, the Partners Portfolios funds offering will continue to be an important area of focus.”

While a number of funds will see their MER cut by between five and 50 basis points, Scotia is raising the MER on Scotia Canadian Income Fund A, Scotia American Growth Fund F, Scotia Canadian Income Fund F, Scotia Canadian Balanced Fund F, Scotia Resource Fund F and Scotia Canadian Dividend Fund F by between 12.5 and 25 basis points.

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Securities transactions slowed in October

(December 16, 2004) International securities transactions dropped off in October, Statistics Canada reported today. Foreign investors bought $2.2 billion of Canadian securities in October, down from $7.6 billion in September.

Year-to-date, foreign investors have purchased $30.2 billion in Canadian equities, the highest level since the stock market bubble of 2000.

Canadian investors acquired $1.5 billion in foreign securities in October, off from $4.2 billion the previous month.

Foreign investors purchased $589 million worth of Canadian stocks in October and $1.5 million in bonds. Meanwhile, Canadian investors purchased $833 million in foreign stocks, mostly U.S. equities and $635 million of foreign bonds, with two-thirds invested in U.S. corporate bonds.

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Statistics Canada reports on RRSP withdrawals

(December 15, 2004) More than one-quarter of Canadians made at least one withdrawal from their RRSP before retirement in the 1990s, Statistics Canada says.

“In fact, between 1993 and 2001, the number of taxfilers aged 20 to 59 who made premature withdrawals from their RRSPs increased at more than three times the pace of those who contributed,” StatsCan said in a report released today.

In 2001, about 5.7 million taxfilers contributed to an RRSP, while just over one million withdrew funds. Contributions by these people in 2001 amounted to just over $24 billion, and withdrawals to about $4.4 billion.

The study excluded funds taken out of RRSPs through the Home Buyers Plan and the Lifelong Learning Plan. Among those studied, the death of a spouse had the biggest impact on RRSP withdrawals, the agency said. People who lost a spouse were far more likely to withdraw funds, and they withdraw large amounts. Other factors included job loss or starting a new business.

Older individuals tended to withdraw larger amount, StatsCan added, which may not be surprising given they have likely accumulated more. Still, in 2001 nearly one-fifth of taxfilers aged 50 to 59 who removed funds from their RRSPs took out $10,000 or more, a time in their lives when returning money to an RRSP could prove difficult, the agency noted.

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Brandes funds hit by Bombardier decline

(December 15, 2004) The Brandes Canadian Equity fund will be most affected by the recent fluctuations in Bombardier share prices, according to Morningstar Canada.

According to Morningstar’s database, 107 Canadian funds have positions in Bombardier. The Brandes Canadian Equity Fund has the biggest, with nearly 2.7 million shares representing 3.7% of the fund’s portfolio. Brandes’ Canadian Balanced Fund also has 2.5% of its portfolio in Bombardier, putting it in the top 10 most affected funds.

Bombardier’s share price plunged on Monday following the announcement that CEO Paul Tellier would be leaving the firm. However, the stock has bounced back somewhat on news that retired CEO Laurent Beaudoin has returned to take the helm.

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Northwest to close specialty equity fund

(December 15, 2004) Northwest Mutual Funds is closing the Northwest Specialty Equity Fund to new purchases, effective January 15, 2005.

The fund has assets under administration of nearly $212 million, a rise of more than 180% over the last five years.

“The Northwest Specialty Equity Fund has flourished in the small cap sector for over fifteen years,” says Northwest president Michael Butler. “But with success comes growth and maturity. At today’s level of assets, our management team felt that it was in the best interest of current unitholders to close the fund to maintain the level of quality that Northwest strives to provide.”

The fund will remain open for purchases as part of the Northwest Quadrant Portfolio asset allocation service, existing pre-authorized payment plans and automatically reinvested distributions.

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Fed raises rates again

(December 14, 2004) The Federal Open Market Committee has raised its trend-setting overnight rate by 25 basis points to 2.25%. This is the fifth time in as many policy meetings that the Fed has raised rates.

“The Committee believes that, even after this action, the stance of monetary policy remains accommodative and, coupled with robust underlying growth in productivity, is providing ongoing support to economic activity,” read a communiqué posted on the Federal Reserve website.

“Output appears to be growing at a moderate pace despite the earlier rise in energy prices, and labour market conditions continue to improve gradually. Inflation and longer-term inflation expectations remain well contained.”

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Standard Life promotes Iannicelli

(December 14, 2004) Standard Life has announced the appointment of Joseph Iannicelli as president of Standard Life Canadian operations, effective January1, 2005, replacing Claude Garcia.

“During his career at Standard Life, Joseph has constantly demonstrated strong leadership qualities in all his roles,” said Sandy Crombie, CEO of Standard Life. “We are very fortunate to have a man of his calibre to succeed Claude Garcia and we are delighted that he has agreed to lead our Canadian operations, which are integral to the Group’s plans for the future.”

Iannicelli is currently senior vice-president of group insurance, Canadian operations. He joined Standard Life in 1992 and, in 1995 was appointed regional sales manager, group insurance in Toronto. He became vice-president, marketing, group life and health four years later and then was appointed to his current position in December 2002.

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GAMA seeks Advocis membership

(December 14, 2004) GAMA International Canada (GAMA), the professional association exclusively for leaders in distribution management within the financial services industry, is in talks to build a closer relationship with Advocis.

“This relationship will bring many benefits to both GAMA and Advocis members,” says Michael Gau, 2004-05 president, GAMA International Canada. “We are excited to experience the synergies of having our managers’ association work more closely with Advocis as the association for advisors, especially since our respective members themselves are so closely interconnected in their day-to-day roles.”

Pending GAMA membership approval, GAMA will operate as a conference of Advocis, resulting in “improved operational capabilities and enhanced opportunity for GAMA members.” GAMA’s Oakville operation will be moved to Advocis’ Toronto headquarters.

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Crocus suspends redemptions, reviews portfolio

(December 14, 2004) Crocus Investment Fund has received regulatory approval to suspend redemptions and to halt sales of its shares as it undertakes an organizational review and comprehensive assessment of the value of its portfolio.

“These initiatives are important and necessary steps to advance the interests of our shareholders and investment partners,” said Peter Olfert, acting chair of the board. “Ultimately, the conclusions will provide all stakeholders with a clear picture on where the fund stands, and ensure our business is structured soundly for the future.”

The decision to undertake this work was precipitated by underperformance of the fund and in light of new developments with key holdings in the portfolio. The board has appointed Alfred Black to interim CEO of Crocus Investment Fund.

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OSC, funds reach deal; no details revealed

(December 13, 2004) The OSC has announced it has reached a settlement with CI Mutual Funds Inc., AGF Funds Inc. and I.G. Investment Management, Ltd. over allegations the firms allowed market-timing in some of their overseas funds.

No details of the settlement can be released until December 16, however, when the OSC will convene hearings, starting at 10 a.m., to consider the three settlements.

The OSC is yet to reach a settlement with AIC Limited, and negotiations are ongoing. It says it expects to reach an agreement early next week.

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RBC refunds accidental fees

(December 13, 2004) RBC Royal Bank will refund service fees to some customers who were charged a separate fee for a service that should have been included in their banking package fee.

“We immediately conducted an in-depth review of client accounts that might be impacted,” said Cathy Honor, head of RBC Payments and Transactions. “While our employees have been correcting the situation on an individual basis, now that our review is complete, we have suspended the individual charges for these clients and have initiated a refund process.”

The total amount refunded will be approximately $9.2 million, including interest paid to 152,000 clients, with the majority receiving an average refund of $60.00 per account.

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Laurentian Bank opens three new “boutiques”

(December 13, 2004) Laurentian Bank has opened three “financial services boutiques” in Gatineau (Hull Sector), Mascouche and Sainte-Dorothée (Laval). These boutiques follow the launch of the first in Blainville last November and will be followed by another in LaPrairie.

The bank is trying to make its branches more appealing and comfortable, with more open architectural design and the elimination of physical barriers between the bank’s employees and clients.

Laurentian Bank’s financial services boutiques offer their clients new play areas for children, a lounge corner to relax with a cup of coffee, as well as a library section where customers can learn about different banking-related subjects.

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TD Waterhouse launches Premier Managed Portfolios

(December 13, 2004) TD Waterhouse has launched Premier Managed Portfolios, a new separately managed account program available through TD Waterhouse Private Investment Advice.

“The Premier Managed Portfolios program offers exceptional tools for advisors, allowing them to provide quality investment portfolios for affluent clients,” said Ellen Morita, senior manager, Investment Solutions. “Further, TD Asset Management’s Research and Portfolio Strategy group ensures individual accounts are overseen by top level money managers. From there, the advisor liaises with the client to ensure the correct investment strategies are in place to address the client’s needs.”

The program requires a minimum investment of $500,000, with $100,000 invested per account/manager. Premier provides streamlined monthly custody reporting and quarterly performance reporting.

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Transamerica lowers seg fund fees

(December 13, 2004) Transamerica Life Canada has lowered the management fees on select imaxxGIF segregated funds, effective today. The fee reduction applies to guaranteed investment funds in all guarantee levels within the program.

“Investors will benefit from the reduced fees as more of their investment dollars go directly to their portfolio, a prime opportunity at RRSP season,” said Geraldo Ferreira, vice-president, investment product development and marketing. “The benefit to the independent advisor is that the fund offering, which is already made up of top-performing funds, is now that much more appealing to investors.”

MER reductions will vary from fund to fund within the imaxxGIF family, ranging from five basis points to 70 basis points, depending on the fund and guarantee level.

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