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(January 25, 2007) RBC Financial Group has launched the RBC Global Titans Deposit Notes, Series 1. This is the first time RBC Asset Management will be the investment manager for the equity exposure of a principal protected note.

RBC said these notes are designed for risk-averse retail investors that are seeking to diversify their portfolios. The notes will be linked to a notional portfolio comprised of global equities and potentially bonds, if required.

The allocation between the bond and the equity exposure will be based on a dynamic re-balancing strategy. The initial allocation to equity will be 100% and may be increased or decreased over the term of the note. The maximum potential equity exposure is 200%, which is achieved through the use of low cost leverage.

“The launch of this new note is consistent with our message that investors should proactively consider the amount of their portfolio that is allocated to assets outside of Canada,” said Brett Berman, vice-president, research and development, RBC Asset Management. “The RBC Global Titans Deposit Notes give investors one more alternative to achieve exposure to global markets with the additional feature of principal protection, at a reasonable cost.”

The notes will be available through advisors until March 16, 2007; the Series 1 notes have a maturity date of September 22, 2014.

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Global performance on the minds of executives

(January 25, 2007) A survey released by Accenture finds that nearly one-half of executives polled at some of the world’s largest companies say their chief concern as their businesses become more global is the ability to maintain a common corporate culture around the world.

The annual survey is designed to identify the business priorities and major concerns of executives at large companies throughout the world. Accenture contacted 919 executives in the U.S., Canada, Italy, France, the U.K., Germany, Spain and Japan.

What the survey found is that when asked to identify the greatest challenges to building global enterprises, the greatest number of respondents, 49%, selected the “ability to maintain a common corporate culture”; this was followed closely by “understand local customs and ways of doing business,” the greatest challenge of 44% of respondents.

Another challenge that many respondents named was the ability to “service remote clients/customers effectively” (41%), while 36% selected “the impact of the global economy.”

The survey finds that the challenges are weighing heavily on executives’ confidence in their abilities to compete globally. Twenty-two per cent said their organizations are poorly equipped to succeed as global enterprises, even though the majority of respondents said that their employees, suppliers and customers are more global now than they were five years ago.

This uncertainty is particularly prevalent in East Asia, where 48% of executives in China, and more than 30% in Japan, feel they are not equipped properly for the global marketplace.

Mark Foster, Accenture’s group chief executive of business consulting & integrated markets, said the critical challenge for management is for companies to maintain core values but develop a global corporate identity that is recognized across borders.

“To succeed in today’s global environment, companies must create a strong and diverse leadership team with knowledge spanning disparate markets,” Foster said. “[Companies] must build organizations that abandon the traditional geography-based operating models, which often fail to recognize dramatic differences in market needs and the resulting management challenges,” said Foster.

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ASC imposes $90,000 in fines on fraudulent trader

(January 25, 2007) The Alberta Securities Commission has ordered $90,000 in penalties and costs, as well as market bans, against Calgary resident Howard Hills.

The ASC panel found that Hills engaged in illegal distributions of securities, filed documents with the ASC that contained false information, failed to make other required filings and made false promises to some investors.

In its decision, the ASC panel determined that “Hills’s misconduct exposed identifiable investors and the capital market generally to significant harm.” He is banned for 10 years from trading securities, using exemptions and acting as a director or officer of any issuer. The ASC also ordered him to pay an administrative penalty of $50,000 and $40,000 in costs.

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Hartford changes fund names, minimums

(January 25, 2007) Hartford Mutual Funds has announced name changes for 11 of its funds; effective January 25; 2007 it will be making name and investment requirement changes to 11 mutual funds.

The affected funds include: Hartford U.S. Capital Appreciation; Hartford Global Leaders; Hartford U.S. Stock; Hartford U.S. Growth and Income; Hartford Canadian Stock; Hartford Canadian Value; Hartford Growth and Income; Hartford Canadian Equity Income; Hartford Advisors; Hartford Bond and Hartford Money Market.

At the same time, the company will reduce the minimum investment requirements for subsequent purchases, to $50. Changes to dealer service fees are such that after the six years following an investor’s purchase of Class B units the maximum annual service fee rate increases from 0.50% to 1.00%.

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(01/25/07)