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The Bank of Canada will maintain its target overnight rate at 0.25%, with the trend-setting bank rate remaining at 0.5%, the bank announced on Tuesday, Dec. 8.

“While significant fragilities remain, global economic developments have been slightly more positive and the global outlook has improved modestly relative to the bank’s projection in its October monetary policy report,” the bank said in a release.

Economic production continued to shift away from exports and move toward domestic consumption, resulting in weaker than expected GDP growth in Q3. Meanwhile core inflation is slightly higher than the bank expected.

“The bank continues to expect economic growth to become more solidly entrenched over the projection period and inflation to return to the 2% target in the second half of 2011,” the bank said.

Interest rates will remain at current levels until the end of the Q2 2010 in order to reach that 2% target.

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Clarington closes Inhance deal

IA Clarington Investments has completed the transaction to purchase assets of Inhance Investment Management from Vancouver City Savings Credit Union (Vancity). As part of the transaction, IA Clarington has merged Inhance managed funds with funds managed by IA Clarington.

Veteran Inhance managers Stephen MacInnes and Dermot Foley will remain with the Vancity group and continue to advise the new IA Clarington socially responsible investment funds.

“Establishing this relationship with Industrial Alliance and IA Clarington means our members can continue to access high quality SRI funds at their local Vancity branch,” says Tamara Vrooman, president and CEO of Vancity. “It enables us to retain our SRI expertise and focus on what we do best, while bringing socially responsible investments to a much wider marketplace. IA Clarington is a strong, experienced mutual fund manufacturer that offers a large family of funds for our members to choose from.”

The Inhance fund family, Vancity Circadian fund family and Vancity Perspectives portfolio solutions family have been merged with funds managed by IA Clarington. These bring an additional $92 million in assets under management to IA Clarington, boosting AUM to more than $7 billion.

Industrial Alliance, the parent of IA Clarington, has launched a socially responsible segregated fund—the SRI Balanced (Inhance) Fund—which is available through its Ecoflextra GMWB product.

“We see socially responsible investing as a natural response to the increased global focus on environmental respect and supporting the communities in which we live and work,” said David Scandiffio, president of IA Clarington. “We feel it is important to broaden our current fund line-up and do so in a way that provides investors with investments that they can feel good about.”

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Many retirees just scraping by

Today’s retirees represent a wealth of knowledge for those approaching retirement, forming the basis of the new Desjardins Financial Security’s 2009 Rethink Retirement survey.

The survey found that just over half (55%) of retirees have enough income to not only cover their basic needs, but indulge in hobbies, travel and treating the grandkids.

But the survey also found that 27% are just scraping by, and among that group, 62% earn less than $20,000 per year. More disturbingly, 44% of this cohort went further into debt over the past year.

If there is a silver lining to these not-so-golden years, it may be that employers are willing to hire current retirees to replace retiring baby boomers. The survey found 16% of retirees still worked at least part-time, although their reasons varied.

Among those working, 46% said it was to fund personal projects, while 29% said they worked because their retirement income had been wiped out by the markets.

Perhaps not surprisingly, those who retired early and are between 55 and 64 years of age were the most likely to still be working (25%), compared to 11% of those over 65.

(12/08/09)