Briefly:

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(June 27, 2006) A quarterly poll of investment managers by Russell Investment Group found that support for Canadian equities has deteriorated to 15%, the lowest percentage this quarter for any equity class, including emerging markets.

According to the survey the utilities sector is the only sector that managers are somewhat upbeat about. “Canadian investment managers are growing increasingly cautious and have a renewed appreciation for risk and volatility,” says Tim Hicks, chief investment officer, Russell Canada.

Only 6% of the senior-level investment decision-makers at Canadian equity and fixed income managers polled by Russell said they see the market as undervalued whereas 46% see it as being too expensive, up five percentage points over last quarter.

Support for those sectors that are heavily swayed by interest rate movements — including financials and the telecom sectors — fell the most last quarter as managers shift their focus to defensive stocks.

Surprisingly, despite the sharp sell-off at the end of the quarter there was only a modest change in attitudes towards the materials sector. Almost one in three managers are still upbeat about the sector, which is consistent with the previous quarter. “Managers are indicating that the recent market moves amount more to a correction in a bull market for commodities than the beginning of a prolonged downturn,” said Hicks.

On the flipside, managers are becoming more bullish on bonds. The survey found that the bearish managers dropped 40 percentage points to 32% while the bulls increased 16 percentage points to 23%. According to the survey, the support indicates managers are seeing some value returning to bonds, especially relative to equities.

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RBC announces fund shakeup

(June 27, 2006) RBC Asset Management is making a series of changes to its fund line-up, including changing names, lowering management fees and minimum balance requirements for some funds. At the same time RBC is adjusting the asset class weightings and list of funds eligible to be included in its Select Portfolios.

The management fee on the Advisor Series of the RBC Blue Chip Canadian Equity Fund is being reduced to 1.75% from 2%. RBC Premium Money Market Fund will cut its minimum investment to $100,000 from $250,000. The bank is also going to permit the manager of the RBC Life Science and Technology Fund to invest in technology and life science companies without restriction. Currently the fund maintains at least a 30% weighting in each of the technology and life sciences sectors.

RBC is also changing the names of four of its funds. The RBC Dividend Fund will become the RBC Canadian Dividend Fund; the RBC Global Health Sciences Sector Fund will become the RBC Global Health Sciences Fund; RBC U.S. RSP Index Fund is changing to the RBC U.S. Index Currency Neutral Fund; and the RBC International RSP Index Fund will become the RBC International Index Currency Neutral Fund.

All of the above changes will be effective July 4.

In another release, RBC announced changes to its RBC Select Portfolios, the RBC Select Choices Portfolios, the RBC Cash Flow Portfolios, and the RBC Target Education Funds.

The bank intends to adjust the target weightings of the asset classes for the RBC Select Portfolios and the RBC Select Choices Portfolios to better align them with its overall long term outlook for the global economy and capital markets.

Aside from the changes to the target weightings, RBC is making the RBC Canadian Diversified Income Trust Fund, RBC Blue Chip Canadian Equity Fund (which is being renamed the RBC North American Dividend Fund effective July 4), the RBC U.S. Equity Currency Neutral Fund and the RBC U.S. Mid-Cap Equity Currency Neutral Fund eligible to be included in each Select Portfolio. The change is expected to enable the portfolio manager to achieve greater diversification for investors.

Similarly, four existing funds will now be eligible for the Select Choices Portfolio. They are: the RBC U.S. Equity Currency Neutral Fund, RBC U.S. Mid-Cap Equity Fund, RBC U.S. Mid-Cap Equity Currency Neutral Fund and the RBC O’Shaughnessy International Equity Fund.

These changes will be effective August 1, 2006.

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CFP goes to China

(June 27, 2006) The Financial Planning Standards Board is set to become the exclusive administrator of the CFP designation in China.

The FPSB will enter the world’s most populous country through a licensing agreement with the Financial Planning Standards Council of China. By introducing the internationally-recognized CFP certification standards to China, FPSCC will improve the competency and skills of China’s financial services practitioners and improve the public’s confidence in the quality and advice of China’s financial planning practitioners.” said Liu Hongru, FPSCC’s chair.

The FPSB and FPSCC spent weeks in December 2005 working with an International Advisory Panel made up of certification and standards experts from Canada, Chinese Taipei, Hong Kong and the United States to bring the certification program to China.

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PFSL Investments Canada proposes fund mergers

(June 27, 2006) PFSL Investments Canada, the trustee and manager of the Primerica Concert Allocation Series of Funds, is proposing to merge five funds.

Under the proposal, Primerica International Aggressive Growth Portfolio Fund and Primerica Global Aggressive Growth Portfolio Fund would be collapsed into the Primerica Canadian Aggressive Growth Portfolio Fund. That fund would then be renamed Primerica Aggressive Growth Fund. Primerica International High-Growth Portfolio Fund would be folded into the Primerica Canadian High Growth Portfolio Fund and rename simply Primerica Growth Fund. Primerica International Growth Portfolio Fund would be absorbed by Primerica Canadian Growth Portfolio Fund to form Primerica Moderate Growth Fund. And lastly, Primerica Canadian Conservative Portfolio Fund would be added to Primerica Canadian Balanced Portfolio Fund to become the Primerica Conservative Growth Fund.

At the same time, PFSL is proposing to change the fundamental investment objectives and investment strategies of each of the remaining funds, including the Primerica Canadian Income Portfolio Fund and Primerica Canadian Money Market Portfolio Fund (to be renamed Primerica Income Fund and Primerica Canadian Money Market Fund, respectively).

Under the proposed changes, the portfolio advisor will be free to invest in securities without having to adhere to specific target weightings.

All changes are subject to regulatory and unitholder approval and are expected to take effect on or about August 25, 2006.

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TSX to withstand global consolidation trend: CEO

(June 27, 2006) The TSX Group’s CEO says his exchange will not be gobbled up in the flurry of securities exchange mergers taking place around the globe.

When the dust settles, Richard Nesbitt told Investment Industry Association of Canada (IIAC, formerly the IDA — Industry Association) conference delegates gathered in Whistler, B.C., that the TSX will be one of the three or four North American exchanges left standing.

Still, competition will continue to intensify, he added. In order to stay ahead of today’s market challenges Nesbitt pointed to some of the initiatives the TSX has already undertaken, including its expansion across asset classes and its integration of acquisitions, including its significant position in CanDeal, Canada’s leading electronic fixed-income market.

The TSX will continue to improve its service, he said. Later this year, the exchange will roll out ATX (Alternative Trade eXecution), a new high-speed TSX trading facility that will match firm order flow against in-house interest as well as the undeclared interest of other market participants. ATX is slated to be released at the end of the year.

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BMO makes executive appointments

(June 27, 2006) BMO Capital Markets has hired Eric Wurtzebach as director and Faris Mansour as vice-president in its Real Estate & Construction group in the U.S.

The two hires are the fourth and fifth senior people brought on at BMO in the past month. Both of the new senior staff come from Silver Portal Capital in the U.S.

Wurtzebach joins BMO Capital Markets from the real estate investment banking firm Silver Portal Capital, where he was a founding partner. He has experience acting as a managing underwriter, placement agent and advisor on over $5.5 billion of real estate equity, debt and financial advisory transactions.

Mansour was also founding partner at Silver Portal Capital. He has completed over $8 billion in merger, acquisition and divestiture advisory assignments and more than $9 billion in public and private capital raising transactions.

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