TORONTO, May 16, 2019 /CNW/ - Capital International Asset Management (Canada), Inc. ("Capital Group") announced today the following changes across its mutual funds:
Additional tiers for lower management fees
Effective June 1, 2019, Capital Group will implement new management fee tiers on its Capital Group Global Equity FundTM (Canada) ("Global Equity Fund"), Capital Group Global Balanced FundTM (Canada) ("Global Balanced Fund") and Capital Group World Bond FundTM (Canada) ("World Bond Fund"). These fee tiers allow Capital Group to pass economies of scale on to investors as fund assets grow.
A new lower management fee tier will apply to Global Equity Fund assets in excess of $6.5 billion.
Capital Group Global Equity Fund (Canada) Annual management fee rates
|
||||||
Asset Tiers |
Series A & T4 |
Series B* |
Series D |
Series F & F4 |
||
Up to $500 million |
1.80% |
1.95% |
1.05% |
0.80% |
||
Over $500 million and up to $1.5 |
1.75% |
1.90% |
1.00% |
0.75% |
||
Over $1.5 billion and up to $3.5 |
1.71% |
1.86% |
0.96% |
0.71% |
||
Over $3.5 billion and up to $6.5 |
1.685% |
1.835% |
0.935% |
0.685% |
||
Over $6.5 billion (as of June 1, |
1.665% |
1.815% |
0.915% |
0.665% |
* |
Effective May 24, 2018, Series B units are no longer offered for sale but additional units may continue to be issued in connection with reinvested distributions. |
For Global Balanced Fund, a new lower management fee tier will apply to assets in excess of $1.5 billion:
Capital Group Global Balanced Fund (Canada) Annual management fee rates
|
|||||
Asset Tiers |
Series A & T4 |
Series B* |
Series F & F4 |
||
Up to $500 million |
1.75% |
1.90% |
0.75% |
||
Over $500 million and up to $1.5 |
1.70% |
1.85% |
0.70% |
||
Over $1.5 billion (as of June 1, |
1.67% |
1.82% |
0.67% |
* |
Effective May 24, 2018, Series B units are no longer offered for sale but additional units may continue to be issued in connection with reinvested distributions. |
In addition, the administration fee for Global Balanced Fund has decreased by 3 basis points as the portfolio's assets recently surpassed $1 billion.
A new lower management fee tier will apply to World Bond Fund assets in excess of $500 million:
Capital Group World Bond Fund (Canada) Annual management fee rates
|
||
Asset Tiers |
Series A & AH |
Series F & FH |
Up to $500 million |
1.15% |
0.65% |
Over $500 million (as of June 1, |
1.11% |
0.61% |
These fee tiers will also impact those series with negotiated fees, since the negotiated management fee for Series I units will not exceed the fees payable for Series F units of the funds, and the negotiated management fee for Series O units will not exceed the fees payable for Series A units of the funds. Please see the prospectus for additional details.
Management fee reductions on Capital Group Emerging Markets Total OpportunitiesTM Fund (Canada)
Effective June 1, 2019, the annual management fee for Capital Group Emerging Markets Total Opportunities Fund (Canada) ("Emerging Market Total Opportunities Fund") will be reduced by 10 basis points. The new annual management fee rates for Series A, Series T4, Series B*, Series D, Series F and Series F4 of Emerging Markets Total Opportunities Fund will be as follows:
Capital Group Emerging Markets Total Opportunities Fund (Canada) Annual management fee rates
|
||||
Current |
New (as of June 1, 2019) |
|||
Up to $500 million |
Over $500 million |
Up to $500 million |
Over $500 |
|
Series A & T4 |
2.00% |
1.90% |
1.90% |
1.80% |
Series B* |
2.15% |
2.05% |
2.05% |
1.95% |
Series D |
1.25% |
1.15% |
1.15% |
1.05% |
Series F & F4 |
1.00% |
0.90% |
0.90% |
0.80% |
* |
Effective May 24, 2018, Series B units are no longer offered for sale but additional units may continue to be issued in connection with reinvested distributions. |
The reduction in the management fee will also impact the negotiated management fee for Series I units since the negotiated management fee for Series I units will not exceed the fees payable for Series F units of Emerging Markets Total Opportunities Fund.
What these changes mean to investors
The MER, or management expense ratio, includes the management fee, operating expenses (including the administration fee) and taxes on those fees. Lower fees result in lower MERs, which can contribute to better results for investors, continuing Capital Group's longstanding practice of making decisions based on what they believe is in the best long-term interest of investors.
Management team updates
Capital Group Canadian Core Plus Fixed Income FundTM (Canada)
Effective May 31, 2019, the mandate will add the following portfolio managers (years of industry experience, location):
- Thomas H. Høgh (32, London)
- Thomas Reithinger (8, London)
Mark Brett will transition off of the portfolio.
Capital Group U.S. Equity FundTM (Canada)
On or about June 1, 2019, the mandate will add the following portfolio managers (years of industry experience, location):
- Grant L. Cambridge (26, Los Angeles)
- Joyce E. Gordon (38, Los Angeles)
- James B. Lovelace (37, Los Angeles)
- Donald D. O'Neal (33, San Francisco)
- Eric S. Richter (27, Washington, D.C.)
- Martin Romo (27, San Francisco)
Mark Hickey will transition off of the portfolio.
How The Capital SystemTM accommodates change
Capital Group has utilized The Capital System, a proprietary investment approach, for over 60 years. The system creates a complementary mix of investment professional approaches, experience levels, backgrounds and areas of focus. One of its many benefits is that changes to the portfolio manager lineup are less disruptive to the overall strategy than they would be in a single-manager system. A manager's departure from or addition to a strategy happens in an orderly manner as each strategy is built to ensure long-term continuity around a team of decision-makers. These shifts can be made with minimal disruptions to the day-to-day operations and the overall objective of the strategy.
Lower risk rating for Capital Group Canadian Focused Equity Fund (Canada)
As a result of an annual review of the investment risk level of the fund, the risk rating for Capital Group Canadian Focused Equity FundTM (Canada) ("Canadian Focused Equity Fund") changed from "Medium" to "Low to Medium." The risk rating of the fund is determined in accordance with the methodology required by the Canadian securities regulators.
There are no changes to the investment objective or strategies or management of the fund associated with its new risk rating.
More information on the risk rating methodology, which includes the historical volatility risk as measured by the standard deviation of fund performance, can be found in the prospectus.
Portfolio subadvisor changes
Effective July 1, 2019, Capital Research and Management Company, an affiliate of Capital Group, will assume portfolio subadvisor responsibilities for the following Capital Group funds: Canadian Focused Equity Fund, Emerging Markets Total Opportunities Fund, Capital Group International Equity FundTM (Canada) and Capital Group Canadian Core Plus Fixed Income Fund (Canada). Capital Guardian Trust Company will cease to be the subadvisor for those funds.
There are no changes to the investment objectives or the strategies of the funds.
Information about the changes mentioned above that apply to the currently offered series will be available in the Funds' simplified prospectus to be filed in connection with these changes, which will be available through SEDAR at www.sedar.com and through the Manager's website at capitalgroup.com/ca.
About Capital Group
Capital International Asset Management (Canada), Inc. and Capital Group Funds are part of Capital Group, a global investment management firm originating in Los Angeles, California. Since 1931, Capital Group has been singularly focused on delivering superior results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. As of December 31, 2018, Capital Group manages more than US$1.6 trillion in equity and fixed income assets for millions of individual and institutional investors around the world.
SOURCE Capital Group Canada
Media contact: Caroline Semerdjian, [email protected], (213) 615-3185, Website: www.capitalgroup.com/ca/en
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