Mutual fund line-up gets a shake-up

Mutual fund line-up gets a shake-up

Mutual fund line-up gets a shake-up One investment company is looking to merge its funds, following the recent changes to the fundamental investment objectives of two of its mutual funds.

NEI Investments announced the recent proposed merger of funds, with securityholders of the Terminating Funds and the NEI Northwest Macro Canadian Asset Allocation Corporate Class will be asked to approve the mergers at a meeting to be held on or about August 3.

If approved, the mergers will be effective on or about September 14.

Earlier, NEI announced changes to the fundamental investment objectives of two of its mutual funds, on June 8, which were approved at a unitholder meeting on June 1.

Unitholders of the NEI Select Canadian Balanced Portfolio and the NEI Select Canadian Growth Portfolio approved the Funds to invest up to 100 per cent of their property in foreign securities. As part of these changes, effective June 8, 2015 the Funds will be renamed the NEI Select Balanced Portfolio and NEI Select Growth Portfolio, to more accurately reflect the revised portfolio objectives and asset mixes. The risk ratings of the Funds were unaffected by these changes.

“These changes to the NEI Select Portfolios have been carefully calculated and measured by our investment team,” said Daniel Solomon, Chief Investment Officer, NEI Investments. “They represent structural strategic thinking within the given risk framework of each portfolio— reducing potential overlap while enhancing overall diversification.”

If the proposed fund mergers are approved, purchases of, and switches to, securities of a Terminating Fund will be suspended after the close of business on September 8. Following the effective date of the mergers, Pre-Authorized Payment Plans and Automatic Withdrawal Plans that were established with respect to a Terminating Fund will be re-established with respect to the applicable Continuing Fund – unless affected securityholders advise otherwise.

“We regularly review our product lineup to see if it addresses the needs of our investors, as well as developments across the capital markets,” says Jeremy Peng, director and portfolio manager at NEI Investments. “It is a streamlining of our product offering.”

In terms of the merger, it is to benefit both the terminating fund and the continuing fund unit holder by allowing the funds to have increased size and scale, which typically means the enhanced efficiency of reducing the operating expense, Peng told WP.

In advance of the meetings described above, full details of the proposed mergers will be set out in a notice of special meetings and management information circular that will be sent to securityholders of record as at July 17. The notice of meetings and management information circular will also be available on SEDAR.

NEI Investments believes that the proposed mergers will be beneficial to the securityholders of the Terminating Funds and the continuing Corporate Class funds.