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The Bank of Canada is warning that the loonie is hurting Canada’s recession recovery. The bank left its policy interest unchanged at 0.25% and will hold current policy rates until the end of the second quarter of 2010.

“Heightened volatility and persistent strength in the Canadian dollar are working to slow growth and subdue inflation pressures,” the bank stated, forecasting that growth will be slightly higher in the second half of this year than previously projected but is expected to average slightly lower over the balance of the projection period.

According to the bank, the economy is projected to grow by 3% in 2010 and 3.3% in 2011, after contracting by 2.4% this year.

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S&P launches equal weight indexes

Standard & Poor’s is launching the S&P/TSX Equal Weight Index Suite, which includes an S&P/TSX Equal Weight Global Base Metals CAD Hedged Index, the S&P/TSX Equal Weight Diversified Banks Index and the S&P/TSX Equal Weight Oil & Gas Index.

“Equal-weighted indices provide additional options to investors,” says Jasmit Bhandal, director at Standard & Poor’s Canada. “Designed to meet investors need for benchmarking, investing and trading strategies that require a size-neutral index, the equal weight indices have weighting and rebalancing processes that lead to different return and risk profiles when compared with market capitalization weighted indices.”

The S&P/TSX Equal Weight Global Base Metals CAD Hedged Index is the equal-weighted and Canadian Dollar hedged version of the S&P/TSX Global Base Metals Index, a benchmark of securities involved in the production or extraction of base metals, and a subset of the S&P/TSX Global Mining Index.

The S&P/TSX Equal Weight Diversified Banks Index is the equal-weighted version of the S&P/TSX Diversified Banks Index.

The S&P/TSX Equal Weight Oil & Gas Index provides investors with a portfolio of securities involved in the oil and gas industry. Eligible securities are members of the S&P/TSX 60.

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Small business retirement could open up opportunity: BMO

According to a BMO Retirement Institute survey, 50% of small business owners over age 45 stated that they plan to retire within the next 10 years. If so, this presents a multitude of opportunities for advisors as without researching and investigating all options for exiting the business, owners may fail to appreciate its potential value. Having a succession plan or exit strategy in place could minimize the number of business closures upon retirement.

“The process of succession planning should begin well in advance of the target retirement date since it can take years to develop a comprehensive plan. A formal succession plan should include a retirement timetable, the estimated value of business as well as potential successors or purchasers,” says Tina Di Vito, director, retirement strategies with BMO Financial Group.

In the survey, 81% of owners admitted they do not have a formal succession plan in place and many boomers are delaying their exits because of the recession.

“Most business owners are so focused on growing and maintaining their business they find it difficult, and even emotionally draining, to contemplate selling or winding it down. Our best advice is to speak to our experts in commercial banking and wealth management. They can provide guidance and direction on how to put a succession plan in place,” says Gail Cocker, senior vice-president, commercial banking with BMO. p>

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Russell’s business growing in Canada

Russell Investments’ institutional business in Canada has grown to more than $5.37 billion in assets under management. That’s an 88% increase over the past 12 months.

Russell also reported over $200 million in new defined benefit mandates.

“These results spring from what Russell has to offer institutional investors in Canada—innovative investment strategies, award-winning implementation expertise and a firm dedicated to consulting services that are proving especially valuable in this market environment,” says Andrew Doman, Russell’s president and CEO.

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Good time to review your mortgage

For many Canadians, financial matters are about as enjoyable as their yearly physical exam, however, the current low-rate environment may make it a good time for homeowners to review their mortgages.

“A mortgage isn’t something you sign once every few years and then forget about,” says Jim Rawson, regional manager for Invis. “Life can change substantially in a year, and a regular review can help ensure that your mortgage is still the right fit for your financial situation.”

According to Rawson, a number of major life changes may call for looking over your mortgage, such as starting or growing a family, starting a business, loss or interruption of income, home renovations, purchasing investment property or other major expenditures.

It might also be a good idea to revisit your mortgage if you plan on paying it down quicker, lowering your monthly payments, consolidating debts or improving your overall credit.

“In the end, a yearly mortgage checkup could reveal that the best course of action is no change at all,” says Rawson.

(10/20/09)