TORONTO, June 20, 2013 /CNW/ - IA Clarington Investments Inc. ("IA Clarington" or "the Company"), the manager of IA Clarington Funds and IA Clarington Target Click Funds (collectively, the "Funds"), is announcing that investors of the Funds, other than the Distinction Bold Class, have approved a proposal to change the method of charging operating expenses to the Funds to a fixed rate administration fee model. A quorum was not achieved for the meeting of the Distinction Bold Class, and the meeting of the Distinction Bold Class was therefore adjourned to June 26, 2013 at 11 a.m. at the offices of IA Clarington, at which meeting a quorum will be any securityholder present, in person or by proxy.
"The plan which was approved by investors will provide increased fee predictability and clarity, as certain components of the MER for the Funds will become fixed rather than varying from year to year," said IA Clarington President David Scandiffio.
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. The full impact of the fee reductions may not be fully realized until the new fixed rate administration fee model is in place for a full reporting cycle. In addition, some fees may vary further due to the impact of federal and provincial sales tax harmonization by additional provinces.
Fixed Rate Administration Fee Model
Effective June 20, 2013, IA Clarington will 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 in the event of a significant drop in assets. Similar fixed rate administration fee proposals have been approved by investors at a number of large Canadian mutual fund companies.
Operating expenses payable by IA Clarington include, but are 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, investor communication costs, and regulatory filing fees.
Each Fund previously paid all of its own operating expenses, which comprised 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, and the cost of compliance with any new or changed governmental and regulatory requirements imposed on or after the 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 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 model.
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 $13.5 billion in assets as at May 31, 2013. www.iaclarington.com
SOURCE: IA Clarington Investments Inc.
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