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(September 11, 2006) Franklin Templeton Investments has launched two new funds intended for investors seeking tax-efficient income.

The Franklin Templeton Managed Yield Class fund and the Franklin Templeton Short-Term Yield Class fund are designed to increase after-tax yield by using forward contracts to provide capital gains instead of interest income, the company said in a release.

“Canadians want to invest in income solutions and avoid the drawback that interest income is fully taxable,” says Franklin Templeton Investments president Don Reed. “These new funds are an ideal solution for investors looking for the stability of income and the tax efficiency of capital gains.”

The managed yield fund is focused on providing a return similar to the Bissett Bond Fund, while the short-term yield fund is focused on providing a return equal to the Franklin Templeton Money Market Fund.

“By entering into forward contracts that are tied to the performance of the reference funds, the new funds are positioned to increase after-tax yield,” Reed explains.

Guy Le Blanc — manager of the Bissett Bond Fund and Franklin Templeton Money Market Fund — will run the new funds. They are also part of Franklin Templeton’s corporate class structure, which allows investors to switch between funds and portfolios while deferring taxable events until they redeem from the structure.

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Small businesses happy to stay that way

(September 11, 2006) Small businesses, especially those owned by older entrepreneurs, aren’t too concerned about growth, according to a study released on Monday by CIBC World Markets.

The report, written by CIBC economist Benjamin Tal, found that 60% of all small-business owners in Canada consider themselves “lifestylers,” using their business to generate income, while balancing other, more personal, commitments.

“This, in part, explains why Canadian small businesses do not grow in size as fast as their American counterparts,” Tal writes. “From a policy perspective, one has to realize that a blanket policy aimed at helping small business to grow must first consider the fact that the majority of small firms in Canada do not wish to grow.”

Still, small business activity grew at an annualized rate of 3.7% in 2005, CIBC reports — a notably higher rate than the economy as a whole.

The report also finds that the number of self-employed Canadians has actually declined 3% since the beginning of the year. However, Tal describes that as a positive development, speculating that a larger proportion of the self-employed are now in business by choice, rather than by necessity.

The number of enterprises run by older entrepreneurs has risen an impressive 35% since 2001, Tal adds, by far the fastest-growing segment in the small-business sector. “Long term-demographic trends suggest that older entrepreneurs will play an even more important role in the economic landscape as the population ages.”

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Enbridge receives governance award

(September 11, 2006) The Canadian Coalition for Good Governance has named Enbridge as the country’s leader in corporate disclosure for 2006.

The “governance gavel award” is presented to the company that the Coalition deems to have had the best disclosure of director information to shareholders, including reporting the directors’ amount and type of compensation.

“Disclosure is the window shareholders have into the boardroom. To be effective, it must be detailed, easy to find, easy to understand, accurate and complete, and given in context to provide meaning to the shareholders,” said Doug Pearce of the Coalition. “This award recognizes the companies that are the best in communicating director information to shareholders.”

The three firms that received honourable mentions for their governance practices are Manulife Financial, SNC-Lavalin Group, and TransCanada.

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