Briefly:

(August 1, 2003) Provinces that rely on manufacturing are facing an economic downturn, but resource-based economies should perform well, according to the Conference Board of Canada. Fortunately, though, the think-tank says the downturn should only last into next year.

“Sluggish U.S. economic performance and the soaring Canadian dollar will hurt exports throughout the summer, which hits the Quebec and Ontario economies hardest,” said Peter Hall, associate director of economic forecasting.

Saskatchewan is the predicted leader in economic growth with estimates topping 4.9% for this year, and 3.7% in 2004. In contrast, Ontario should see an economic growth rate of only 1.6% for 2003. Quebec’s 2% gains will be due in large part to government infrastructure spending.

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StatsCan manufacturing survey shows less pessimism

(August 1, 2003) The Canadian manufacturing industry expects production to flatline for the next three months, according to a quarterly report from StatsCan released today.

A majority of responding companies said they foresaw no appreciable difference, while 22% said they expected a decline and 20% said they expected to increase production. This 2% split is smaller than in April’s survey, when the pessimists led by 11%.

Some points of concern for manufacturers are the dropping level of unfilled orders and rising inventories.

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Joint Forum closes consultation round

(August 1, 2003) The Joint Forum of Financial Market Regulators has closed its round of consultation on mutual fund disclosure, saying that it received “strong support” for its efforts.

“We believe the current system tends to overwhelm consumers by asking them to wade through mountains of paper that currently accompany the purchase of segregated funds or mutual funds,” said David Wild, chair of the Joint Forum and chair of the Saskatchewan Financial Services Commission.

The new system the Joint Forum advocates will provide smaller packages of information at more appropriate times. For example, the first “layer” of disclosure would be a brief explanation of what mutual funds and segregated funds are and how they operate. This would be followed by documentation specific to a given fund or fund family when an investor is closer to making their choice of funds.

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Pension funds fare better in Q2

(July 31, 2003) Canadian pension funds have posted positive returns for the second quarter, snapping a two-year losing streak, according to Benchmark investment analysts at RBC Global Services. Benchmark tracks $250 billion in pension funds and reported that not one of Canada’s institutional fund managers posted a loss for the quarter ended June 30.

“But many pension funds are not out of the woods yet, with the average Canadian equity return for the 12 months ending June 30 still slightly negative at -0.9%,” according to Fred Francis, vice-president of value-added products at RBC Global Services. “Nonetheless, this is a dramatic improvement, remembering that from April 2002 to March 2003, the median Canadian equity return within the Benchmark balanced funds universe shrank by an alarming 16.6%.”

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Manulife offers new GIF products

(July 31, 2003) Manulife Investment has announced the introduction of five new guaranteed investment funds (GIFs), available today.

The new funds are MIX Global Value Class GIF, MIX U.S. Large-Cap Value Class GIF, Renaissance Canadian Core Value GIF and Talvest Canadian Equity Growth GIF, as well as the Manulife Dollar-Cost Averaging Advantage GIF.

“Dollar-cost averaging is a proven method for those who want to invest over time and average out the prices of investments,” said J. Roy Firth, senior vice-president of individual wealth management for Manulife Financial. “We think this in an excellent opportunity for investors currently looking for the opportunity to ease into the markets.”

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Great-West reports higher quarterly profits

(July 30, 2003) Great-West Lifeco today reported second-quarter profits of $267 million, an 11% increase from the same period last year. The Winnipeg-based insurer credits the improved profit picture to “favourable mortality and morbidity experience, combined with effective expense management.”

Great-West completed its $7 billion takeover of rival Canada Life earlier this month. In its last earnings statement, also released today, Canada Life reported a second-quarter profit of $121 million, down 5% from 2002. Financial results of the two firms will be combined from now on.

“Our focus for the next 18 to 24 months will be on effectively integrating the operations of [Canada Life] with the operations of Great-West while continuing to provide high-quality service for our clients,” said Great-West CEO Raymond McFeetors.

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National Life offers new term life

(July 30, 2003) National Life has announced the launch of e-Term 100 Insurance, a new product that offers lifetime protection with full guarantees and cost of insurance. rates will be 12% to 15% lower than those on National Life’s universal life plans.

“In addition to offering very competitive premiums, eTerm 100 also allows investors to save money in a tax-deferred account offering daily interest,” says Brian Wrixon, vice-president of individual insurance.

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Two AGF bond funds reclassified

(July 29, 2003) AGF has announced the reclassification of two funds as “high-yield bond funds,” as designated by the Investment Funds Standards Committee (IFSC).

Under such a classification, the AGF Canadian Total Return Bond Fund and AGF Global Total Return Bond Fund must hold at least 25% of their investments in bonds rated below “investment grade.”

“With today’s low interest rates, investors are looking for higher returns in the fixed income portion of their portfolio,” said Clive Coombs, executive vice-president of AGF. “These two high-yield bond funds provide investors with a solid fixed income portfolio.”

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IG cuts MERs on several funds

(July 28, 2003) Investors Group has announced it is cutting the management fees on 19 funds. MERs will fall by an average of 25 basis points on these funds, with some dropping by 40 bps.

The affected funds are sub-advised partner funds from AGF Funds, Fidelity Investments Canada, Mackenzie Financial and Franklin Templeton Investments. Most of the changes are effective immediately, though four funds will not change until August 1.

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(07/28/03)