TORONTO, March 9, 2021 /CNW/ - NEI Investments ("NEI") today announced that the required approvals were received from unitholders to proceed with nine fund mergers and other fund changes. Collectively, these activities will streamline and enhance NEI's responsible investment fund lineup, showcasing the firm's commitment to innovation around environmental, social, and governance ("ESG") considerations, and reinforcing a 30+ year legacy of continuous improvement.
"The changes to our fund lineup underscore NEI's longstanding focus on responsible investment and make it easy for Canadians to build their portfolios with confidence," said Frederick M. Pinto, Head of Asset Management for NEI Investments. "With these mergers, our flagship suite of NEI Select RS Portfolios will be the go-to solutions for investors seeking an all-in-one responsible investment portfolio."
"We are excited to expand the universe of responsible investment opportunities for all Canadians," said John Bai, Chief Investment Officer for NEI Investments. "With the world's economy strengthening, investors now have access to ESG-focused mandates for global high yield bonds and value stocks to help round out their responsible investment portfolios. Historically, these are two asset classes that have benefited during economic recoveries."
Fund mergers
In the tables below, "RS" in the continuing fund name stands for "Responsible Screens." For all funds designated "RS," NEI automatically excludes companies with specific types of involvement in the following industries: tobacco, weapons, nuclear power, gambling, and pornography.
The management and administration fees of the continuing funds will be the same as or lower than the terminating funds. For continuing funds, there will be no changes to sub-advisors, prospectus risk ratings, distribution policies, or series availability as a result of the mergers.
The terminating funds were closed to new and subsequent purchases as of 4:00 pm Eastern Time on March 9, 2021.
The terminating funds in Table 1 below are expected to be merged into the corresponding continuing funds on April 16, 2021.
Table 1
Terminating Fund |
Continuing Fund |
NEI U.S. Equity Fund |
NEI U.S. Equity RS Fund |
NEI International Equity Fund |
NEI International Equity RS Fund |
The terminating funds in Table 2 below are expected to be merged into the corresponding continuing funds on April 23, 2021.
Table 2
Terminating Fund |
Continuing Fund |
NEI Select Income Portfolio |
NEI Select Income RS Portfolio |
NEI Select Income & Growth Portfolio |
NEI Select Income & Growth RS Portfolio |
NEI Select Balanced Portfolio |
NEI Select Balanced RS Portfolio |
NEI Select Growth & Income Portfolio |
NEI Select Growth & Income RS Portfolio |
NEI Select Growth Portfolio |
NEI Select Growth RS Portfolio |
NEI Select Maximum Growth Portfolio |
NEI Select Maximum Growth RS Portfolio |
NEI Tactical Yield Portfolio |
NEI Balanced Yield Portfolio |
ESG enhancements
On April 16, 2021, NEI Global High Yield Bond Fund and NEI Global Value Fund will change their fundamental investment objectives as indicated by the italicized wording below. The purpose of the change is to enhance the ESG characteristics of the funds. For the full text of NEI's approach to responsible investing as set out in its prospectus, see the Appendix below.
NEI Global High Yield Bond Fund
Current investment objectives |
New investment objectives |
The investment objective of this Fund is to provide a high level of current income while maintaining security of capital. The Fund invests primarily in a diversified portfolio of high-yield, higher risk, global corporate bonds and notes and may also invest in other fixed income investments with similar characteristics. Most of the investments will be rated "BBB-" and below by Standard and Poor's or Fitch, and "Baa3" or below by Moody's or an equivalent rating by another recognized bond rating service. The Fund may also invest in investments that are not rated, investments that are in default at the time of purchase, and may invest in investments denominated in emerging market countries' currencies.
It is expected that, except for temporary defensive purposes, the Fund will invest at least 80% of its net assets in high-yielding, income-producing corporate bonds.
Unitholder approval (by a majority of votes cast at a meeting of unitholders) is required prior to a fundamental change of investment objectives. |
The investment objective of this Fund is to provide a high level of current income while maintaining security of capital. The Fund invests primarily in a diversified portfolio of high-yield, higher risk, global corporate bonds and notes and may also invest in other fixed income investments with similar characteristics. Most of the investments will be rated "BBB-" and below by Standard and Poor's or Fitch, and "Baa3" or below by Moody's or an equivalent rating by another recognized bond rating service. The Fund may also invest in investments that are not rated, investments that are in default at the time of purchase, and may invest in investments denominated in emerging market countries' currencies.
It is expected that, except for temporary defensive purposes, the Fund will invest at least 80% of its net assets in high-yielding, income-producing corporate bonds.
The Fund follows a responsible approach to investing as set out at page 32 and 33 of the Prospectus. Unitholder approval (by a majority of votes cast at a meeting of unitholders) is required prior to a fundamental change of investment objectives. |
NEI Global Value Fund
Current investment objectives |
New investment objectives |
The investment objective of the Fund is to achieve long-term capital growth by investing primarily in equity and equity related securities of companies located globally. Unitholder approval (by a majority of votes cast at a meeting of unitholders) is required prior to a fundamental change of investment objectives. |
The investment objective of the Fund is to achieve long-term capital growth by investing primarily in equity and equity related securities of companies located globally.
The Fund follows a responsible approach to investing as set out at page 32 and 33 of the Prospectus.
Unitholder approval (by a majority of votes cast at a meeting of unitholders) is required prior to a fundamental change of investment objectives. |
Fee reduction
On April 16, 2021, the management and administration fees for certain series of NEI International Equity RS Fund (continuing fund) will be reduced to match the management and administration fees for NEI International Equity Fund (terminating fund), according to the table below.
NEI International Equity RS Fund
Fund series |
Current management fee |
Current administration fee |
New management fee |
New administration fee |
Combined fee reduction (bps) |
A |
2.00% |
0.45% |
1.95% |
0.40% |
10 |
F |
1.00% |
0.35% |
0.90% |
0.30% |
15 |
P |
1.75% |
0.35% |
1.70% |
0.30% |
10 |
PF |
0.75% |
0.30% |
0.70% |
0.25% |
10 |
Appendix: Responsible Investing
The following wording is taken from pages 32 and 33 of NEI's prospectus (.pdf):
The Manager defines "Responsible Investing" as an investment approach that incorporates ESG analysis of company performance into the investment decision-making process, and seeks to generate sustainable value for investors, shareholders, other company stakeholders and society as a whole. The Manager executes this approach through a Responsible Investment program that encompasses the following activities:
Exclusionary screening: For certain Funds, companies that derive a material portion of their revenue (as defined by the Manager) from specific industries designated by the Manager, are automatically excluded from those Funds.
ESG evaluations: The Manager conducts proprietary ESG evaluations of companies to determine permissible holdings for inclusion in certain Funds, and to ensure those companies are taking meaningful steps to manage the ESG risks they face. In undertaking these evaluations, the Manager strives to work closely with sub-advisors of the Funds to advance integration of ESG considerations with their respective investment processes.
Corporate dialogue: The Manager uses the special rights that come with shareholder status to engage in dialogues with companies held in the Manager's Funds, to alert those companies to ESG risks, propose solutions to ESG challenges they face and encourage them to improve their ESG performance. When dialogue is not advancing a specific issue facing a company, the Manager may seek the views of other shareholders by filing a shareholder proposal to be included in the management proxy circular and submitted to a vote at the company's Annual General Meeting (AGM).
ESG-focused proxy voting: The Manager takes seriously its responsibility as an investor to vote at AGMs and special meetings of companies held in the Manager's Funds. The Manager has staff responsible for overseeing the execution of its proxy voting and decisions are guided by the manager's ESG-based Proxy Voting Guidelines.
Public Policy and Standards: Public policies and standards affect the rules by which all companies must operate. The Manager may undertake activities in this area to promote change on a broader scale, beyond individual companies, to remove barriers to sustainability disclosure and performance on an industry-wide basis.
Research: The Manager conducts research into a range of Responsible Investment issues to support and enhance company evaluations, corporate engagement and policy work. This research may be shared publicly to facilitate understanding of Responsible Investing among companies, investors and other stakeholders and to help build collaborative efforts in the advancement of Responsible Investing.
The approaches above are applied in whole or in part across all Funds in the Manager's lineup, but are in particular applied to the Funds designated with an "RS", which means Responsible Screens, or those Funds noting "ESG" or "Leaders" in their Fund name.
For more information, see the NEI Responsible Investment Policy, the NEI annual Focus List of company engagements, NEI Proxy Voting Guidelines and NEI Policy Submissions, all of which are available on the NEI website.
Impact Investing and Sustainability-Themed Investing: Consistent with the Manager's commitment to Responsible Investing, certain Funds may also employ strategies that focus on specific sustainability themes or are intended to provide positive environmental or social impacts, in addition to investment returns. Investments of this nature may be in a wide variety of securities including, but not limited to, GICs, term deposits, purchases of individual equities, and purchases of units of other mutual funds or pools.
About NEI Investments
"NEI Investments" and "NEI" refer to Northwest & Ethical Investments L.P., an Ontario limited partnership. NEI Investments is a Canadian asset manager committed to providing focused investment solutions advised by best-of-breed, independent portfolio managers. NEI delivers disciplined, active asset management with a longstanding focus on environmental, social and governance factors, and a well-defined corporate engagement process designed to create sustainable long-term value. NEI is a wholly owned subsidiary of Aviso Wealth, a national, integrated financial services company, with more than $90 billion in assets. For more information please visit www.neiinvestments.com and www.aviso.ca
Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
SOURCE NEI Investments
For media inquiries, please contact: Luba Czyrsky, Senior Manager, Social Media & Public Relations, 647-522-6783, [email protected]
Share this article