TORONTO, April 26, 2013 /CNW/ - IA Clarington Investment Inc. ("IA Clarington" or "the Company"), the manager of IA Clarington Funds and IA Clarington Target Click Funds (collectively, the "Funds"), is announcing a proposal to change its method of charging operating expenses to the Funds which will result in lower MERs for all Funds and provide enhanced clarity and predictability surrounding fees. A special meeting of investors (the "Special Meeting") will be held on or about June 19, 2013 to consider the proposed changes.
"Operating expenses can vary from Fund to Fund and from year to year meaning the MER for a series of a Fund is somewhat uncertain and unpredictable," said IA Clarington President David Scandiffio. "Our proposal will provide investors with increased fee predictability and clarity, as certain components of the MER for the Funds will become fixed rather than varying from year to year."
Scandiffio added that the fixed rate administration fee for each series of a Fund will be lower than the actual operating expenses paid by each series of the Fund during its most recently completed financial year.
Fixed Rate Administration Fee Proposal
IA Clarington is proposing to pay the operating expenses of each Fund other than the fund costs (currently payable by each Fund) in exchange for the payment by the Fund of an annual fixed rate administration fee which, up to December 31, 2015, will be subject to a transitional adjustment payment. Similar fixed rate administration fee proposals have been approved by investors at a number of large Canadian mutual fund companies.
If the Administration Fee Proposal is implemented, the operating expenses payable by IA Clarington will include, but will not be limited to, audit fees, fund accounting costs, transfer agency and recordkeeping costs, custodian costs, administration costs and trustee services relating to registered tax plans, costs of printing and disseminating prospectuses, annual information forms, fund facts and continuous disclosure materials, legal fees, bank charges, investor communication costs, and regulatory filing fees.
Each Fund currently pays all of its own operating expenses, which comprise a portion of the management expense ratio (the "MER") of the Fund. The fund costs, which will continue to be payable by each Fund, are all taxes (including HST, capital taxes, income taxes, withholding taxes), borrowing and interest costs, fees for directors of Clarington Sector Fund Inc. (for corporate class Funds), securityholder meetings costs as permitted, the fees and expenses of the Independent Review Committee of the Funds, the cost of compliance with any new or changed governmental and regulatory requirements imposed on or after the proposed June 20, 2013 implementation date.
IA Clarington referred the proposal to the Funds' Independent Review Committee, which acts in an advisory capacity representing the interests of the Funds. The Independent Review Committee has reviewed the proposal and determined that, if implemented, it would achieve a fair and reasonable result for the Funds.
Investors are invited to visit www.iaclarington.com/fixedadmin for further details on the fixed rate administration fee proposal.
Special Meeting of Investors
The Special Meeting will be held on or about June 19, 2013 to consider the proposed changes. In late May, investors who will be impacted by the proposal and who hold the Funds as of the date of record at the close of business on May 3, 2013 will receive an information circular with full details of the proposed changes as well as a proxy form. The proposed changes are subject to the applicable Funds obtaining all necessary approvals, including investor approval.
About IA Clarington
IA Clarington Investments Inc., a subsidiary of Industrial Alliance Insurance and Financial Services Inc., markets a wide range of investment products, including mutual funds and segregated funds managed by leading portfolio advisors. The Company's philosophy is to select best in class money managers from across Canada and around the world to manage its funds. IA Clarington managed approximately $13.1 billion in assets as at March 31, 2013. www.iaclarington.com
SOURCE: IA Clarington Investments Inc.
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