Planning For The Future...The Retirement FundsThomas Perkins
CI Investments Inc. is proposing mandate changes and mergers for several funds in its lineup as part of a larger effort to simplify and streamline product offerings.
The company said late Monday that three funds will shift from Canadian-focused to global, and three others will be merged. The move comes just one month after Mackenzie Financial Corp. trimmed its fund offerings by one third, and roughly one year after CI made a major push to streamline it's operations by merging 19 funds.
The shift of some of the funds from Canadian-focused to an international focus is consistent with CI's Signature Global Asset Management group's increasingly global focus (an initiative started a decade ago). Those advisers continues to drive a significant portion of net sales for parent company CI Financial Corp.
"The mandate change will benefit the funds by providing the portfolio managers with a much wider range of investment choices and the potential for increased diversification," said Derek Green, president of CI Investments, in a statement.
In the case of the mergers, there are several reasons behind the moves to consolidate. The CI Japanese Corporate Class fund that is merging into the CI Pacific Corporate equity class could allow managers more room to wiggle around the volatility in Japan, for example. While the fund has returned 18 per cent in the year to April 30, its five-year performance is negative (like almost all the other Japanese equity funds in Canada).
For other funds, such as the Cambridge Canadian Stock Fund and Cambridge Canadian Equity Corporate Class, there's an opportunity to eliminate duplication at a time when investors are bombarded with similar choices. In April, when Mackenzie reduced its product lineup by one third, the company attributed the decision to conversations with financial advisers and analysts who said the company had too many funds and too many fund brands.
Anecdotally, investment professionals and portfolio managers have said that investors are saying they want better quality options, not more products to choose from.
Compared to other asset managers, CI Financial Corp. has been a solid performer and its stock is up nearly 23 per cent year-to-date. As of the first quarter this year, it had $82-billion in assets under management from both retail and institutional clients.
So far, the strategy seems to be working. "We believe CI's positive sales trend should continue to outpace peers," said Scott Chan, analyst at Canaccord Genuity Corp. "All of CI's distribution channels continue to show improvement on retail fund sales on a quarter-over-quarter and year-over-year basis."
(Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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