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(November 3, 2006) Long a proponent of overweighting income trusts, the investment strategy team at CIBC World Markets has adjusted their recommended asset mix to match the benchmark weighting for trusts. At 5% of the portfolio, that marks a decrease of three percentage points.

Led by chief strategist Jeffery Rubin, the group has added 2% to its equity allocation, raising it to 59% of the overall portfolio, eight points above benchmark. Bonds also received an increase of 3%, while the already-tiny cash position was wiped out altogether.

The portfolio continues to overweight financials and energy, each by 4.5% compared to the S&P/TSX Composite Index, with utilities overweighted by 1%. Underweighted sectors include consumer discretionary (4.% below benchmark), consumer staples (2.5%) and information technology (3.5%).

The portfolio remains overweight in REITs, however, with the group pointing out that REITs are exempt from the new taxation plan.

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CAIF urges feds to reverse course

(November 3, 2006) The federal government’s decision to tax income trust distributions was a “reckless” and “punitive” move, according to the Canadian Association of Income Funds.

“Mr. Flaherty has clearly made a poorly informed and costly decision on income trusts,” says George Kesteven, president of CAIF. “The government had other options but chose to ignore them and Canadians are now paying the price. Once again, we urge the minister to reconsider his decision and look closely at the other available alternatives.”

Kesteven points out that this policy decision has yet to be made law, and is calling on Canadians to contact their Members of Parliament to demand the policy be dropped. He also claims that the trust structure allows small- to mid-sized businesses to stave off foreign takeover, as a result of foreign ownership limits on trusts.

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Russell adds two sales options

(November 3, 2006) Russell Investments Canada has announced the launch of B-Class units of its LifePoints Portfolios, which allow for a 10% free yearly redemption under the low-load purchase option. Class B units are also available in sales-charge and no-load versions.

“The new low-load and sales-charge options are offered in all seven LifePoints Portfolios,” says David Bullock, managing director of Russell Investments’ private client group. “This initiative is designed to give advisors and investors more choice and flexibility when choosing a purchase option.”

Russell also announced that some of its funds have received regulatory approval to enter into interest-rate and credit-default swaps, providing they are at least three years from maturity.

LifePoints Portfolios provide investors with access to the same managers recommended to Russell’s institutional clients.

(11/03/06)