Briefly:

(October 2, 2003) BMO Investments Inc. has announced its intention to merge several of its funds and rename its “BMO Global Opportunities Class” as “BMO Global Equity Class,” pending regulatory and fundholder approval.

Affected funds include BMO Far East Fund and BMO Latin American Fund which will be merged into BMO Emerging Markets Fund. BMO RSP Japanese Fund, BMO RSP European Fund, BMO RSP Global Financial Services Fund and BMO RSP Global Balanced Fund will be merged into BMO RSP International Index Fund.

BMO’s RSP Global Opportunities Fund, RSP Global Health Sciences Fund, RSP Global Technology Fund and RSP NASDAQ Index Fund will be merged into BMO RSP Global Science and Technology Fund. BMO Global Financial Services Class, Global Health Sciences Class and Global Technology Class will be merged into BMO Global Opportunities Class.

A unitholder meeting will be held November 10, with a target of November 28 for the closing of the mergers.

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TSX sets volume record in September

(October 2, 2003) The Toronto Stock Exchange set a new one-month record for trade volume, topping 5.7 billion shares. The previous record was set in February 2000, when 5.3 billion shares traded hands.

The best known market indicator, the S&P/TSX Composite Index, lost 89 points over the course of the month, finishing at 7421.13. By the end of September, 39.3 billion shares had traded in 2003, a rise of 16% over the same period last year.

Nortel Networks was by far the most active stock, with over 919 million shares changing hands. Bombardier was a distant second, with volume of 168 million shares.

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RBC says fund sales positive for September

(October 2, 2003) RBC Asset Management has released its September mutual fund sales figures, showing a fifth consecutive month of growth.

Net sales hit $53 million, with $124 million in new long-term fund sales offsetting money market redemptions of $71 million. Investors preferred more conservative products, such as the firm’s monthly income fund and its dividend fund.

“Third-quarter statements should provide investor confidence with a bit of a boost,” said Brenda Vince, president of RBC Asset Management. “Equity markets had another solid quarter, reflecting an improving picture of economic growth.”

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Canada Savings Bond rates announced

(October 1, 2003) The federal government has announced rates for this year’s savings bond program. Both Canada Savings Bonds (CSB) and Canada Premium Bonds (CPB) go on sale today.

Premium bonds are only cashable in the 30 days following the purchase anniversary date each year, but do offer a higher interest rate than the traditional CSB which is cashable any time. This year’s CPB offers a compound rate of 3.34% if held for the full five-year term. The CSB offers a rate of 1.75%.

Ottawa is also launching a new issue, the Canada Investment Bond, which is available only through investment dealers. It pays a higher rate than the CPB, but is not cashable before the maturity date.

Canada Investment and Savings, the body responsible for CSB operations, also announced the results of its National Savers Study, which found 61% of Canadians were optimistic about their financial future over the next four years. That’s is down slightly from 63% in 2002, but better than the 54% reported in 1997.

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Ethical terminates half a dozen funds

(October 1, 2003) Vancouver-based Ethical Funds has announced plans to terminate six funds, merging them into other funds with similar investment objectives.

Ethical’s Global Bond, Canadian Equity and Pacific Rim funds will be discontinued, along with the Credential Balanced, Growth and Equity portfolio funds. Ethical says all costs associated with the mergers will be borne by the firm and will not affect investors.

“As a result of the mergers, investors should enjoy increased economies of scale and potentially lower management expense ratios,” Ethical says.

Unitholders will be asked to approve the changes at a special meeting on December 3.

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U.S. report recommends registration for hedge fund managers

(September 30, 2003) An extensive fact-finding report on the U.S. hedge fund industry prepared by staff at the Securities and Exchange Commission (SEC) recommends that hedge fund managers be required to register as investment advisors.

The report concludes that many concerns regarding hedge funds, such as lack of information, the absence of disclosure requirements and an increased incidence of fraud, stem from the unregulated status of the funds and their managers.

“Staff is concerned that the commission’s inability to examine hedge fund advisors makes it difficult to uncover fraud and other misconduct,” the report states.

Registration would allow the SEC to regularly inspect hedge fund managers and collect basic information on the activities of the funds, says the report, noting that hedge funds are becoming “increasingly influential participants in U.S. financial markets.”

“Currently there is more than $600 billion invested in [U.S.] hedge funds,” says SEC chair William Donaldson. “That figure is expected to exceed $1 trillion in the next five to 10 years.”

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OAS rates unchanged as inflation falls

(September 30, 2003) OAS benefit rates will remain unchanged for the remainder of 2003 due to falling inflation, Human Resources Development Canada (HRDC) announced today.

The basic OAS pension, paid to most Canadian seniors, will stay at $461.55 per month.

HRDC reviews OAS rates every quarter and makes adjustments for inflation. Since the current three-month inflation average is lower than the previous average, pension rates will not change for the last quarter of 2003.

The annual inflation rate fell to 2% in August, its lowest level since July, 2002.

The maximum Guaranteed Income Supplement and Allowance will also remain unchanged.

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Advisor Forum 2003 set for kick-off in Montreal

(September 29, 2003) The 2003 edition of Advisor Forum — a national five-city two-day conference for Canadian advisors — debuts on Tuesday in Montreal.

The conference opens Tuesday morning with a keynote address from marketing guru Bill Good, who speaks on the topic “How to be up in any market.” A series of main stage presentations will be held throughout the day, including “Income alternatives for uncertain times,” and “Investment policy statements: A guide to success.”

The opening day wraps up with a top advisor panel discussion, featuring Pierre-Yves Pelland of RBC Investments, Daniel Mercier of JLL Les Sommets (AXA Sherbrooke) and independent planner Annie Boivin.

Author and lecture Jean-March Chaput opens Wednesday’s schedule with a discussion of “Reason and emotion.” Main stage topics include “After-tax returns and after-death concerns” and “Enhancing cash flow in retirement.”

“Financial planning behind the wheel,” is author Eric Brassard’s topic, which completes the Wednesday schedule.

Check Advisor.ca later this week for Advisor Forum coverage from Montreal. The conference shifts to Calgary on October 28-29, followed by Vancouver on November 3-4, Toronto on November 18-19 and wraps up in Halifax on December 1-2.

For more information on the Advisor Forum schedule and to register online for the conference, please click here.

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TD Asset Management offers new GIFs

(September 29, 2003) TD Asset Management Inc. and Transamerica Life Canada have announced the launch of class A and class B funds and portfolios within the TD Guaranteed Investment Funds II (TD GIF II) product line.

Among the new features are:

• 100% deposit maturity/contract maturity and death guarantee with class A funds and portfolios and 75% deposit maturity/contract maturity guarantee, and 100% death guarantee with class B funds and portfolios with no reduction in guarantee benefits based on annuitant age.
• No deferred sales charges deducted from the death benefit except if a death claim is within 12 months of the policy being issued.
• An automatic annual reset of the death guaranteed minimum amount on the contract anniversary date to capture increases in market value.

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New seg fund offered by National Life and Norshield

(September 29, 2003) National Life and Norshield Financial Group have introduced the National Life Global Trading Fund, a new segregated fund with a minimum investment requirement of $1,000.

“Widely accessible, this fund is also offered as part of our hedge accounts, a unique category of investments, for universal life policyholders,” said Brenda Moore, director of marketing, retirement and investment products at National Life. “We believe our brokers and clients will continue to benefit from the products that flow from our partnership with Norshield.”

The fund features a capital guarantee of 75%, and is available as an investment in National Life’s universal life products.

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(09/29/03)