MONTREAL, March 1, 2021
/CNW Telbec/ - National Bank Investments Inc. (NBI) announced today
changes to select NBI Funds. These changes include fund mergers,
the method of charging operating expenses to select NBI Funds to
increase fee predictability and transparency as well as other
changes. Certain changes, as outlined below, are subject to
regulatory and/or securityholder approval. Where applicable,
securityholder approval will be sought at virtual special meetings
(individually, a "Meeting" and collectively, the "Meetings") of
securityholders of each applicable NBI Fund, to be held
concurrently on or about May 17,
2021.
The proposed changes aim to simplify NBI's product lineup, while
also delivering benefits for both investors and advisors offering
NBI Funds.
"NBI is committed to maintaining a client-centric approach while
also providing investors with our best solutions across a variety
of different portfolio managers," said Annamaria Testani, Senior Vice-President,
National Sales at National Bank Investments. "The proposed fund
mergers will allow advisors to better respond to the needs of their
clientele by selecting solutions from a more streamlined product
offering."
"These suggested changes will enhance NBI's product offering by
providing our advisors with an optimized fund lineup," explained
Éric-Olivier Savoie, President and
Chief Executive Officer at National Bank Investments. "Offering a
simplified list of innovative solutions will reinforce our position
as the leading open architecture organization in the industry."
Proposed fund mergers
Subject to obtaining all necessary approvals, NBI proposes to
merge each NBI Fund (individually, a "Terminating Fund" and
collectively, the "Terminating Funds") into the corresponding NBI
Fund (individually, a "Continuing Fund" and collectively, the
"Continuing Funds") as indicated in the tables below.
Securityholders of record on or about April
1, 2021 will receive Meeting materials in mid-April. If
approved, the mergers will be effective on the dates indicated
below. Certain mergers, as noted in the tables below, do not
require securityholder or regulatory approval. Instead, these
investors will be provided 60 days' prior written notice before the
mergers are implemented (the "Pre-Approved Mergers"). The
Pre-Approved Mergers will be completed on a tax deferred basis.
Fund mergers on or about May 21,
2021
Terminating
Funds
|
Continuing
Funds
|
NBI Canadian Index
Fund
|
NBI Canadian Equity
Index Fund
|
NBI U.S. Dividend
Fund
|
NBI SmartData
U.S. Equity Fund
|
NBI Canadian Equity
Fund
|
NBI Jarislowsky
Fraser Select Canadian Equity Fund
|
NBI Real Assets
Private Portfolio
|
NBI Global Real
Assets Income Fund
|
NBI High Yield Bond
Private Portfolio
|
NBI High Yield Bond
Fund
|
Meritage Canadian
Equity Class Portfolio**
|
Meritage Canadian
Equity Portfolio
|
Meritage Global
Equity Class Portfolio**
|
Meritage Global
Equity Portfolio
|
Meritage Growth Class
Portfolio**
|
Meritage Growth
Portfolio
|
Meritage Growth Plus
Class Portfolio**
|
Meritage Growth Plus
Portfolio
|
Meritage Global
Growth Class Portfolio**
|
Meritage Global
Growth Portfolio
|
Meritage Global
Growth Plus Class Portfolio**
|
Meritage Global
Growth Plus Portfolio
|
Fund mergers on or about May 28,
2021
Terminating
Funds
|
Continuing
Funds
|
National Bank Secure
Diversified Fund
|
NBI Secure
Portfolio
|
National Bank
Conservative Diversified Fund
|
NBI Conservative
Portfolio
|
NBI Dividend
Fund
|
National Bank
Moderate Diversified Fund
|
NBI Moderate
Portfolio
|
National Bank
Balanced Diversified Fund
|
NBI Balanced
Portfolio
|
National Bank Growth
Diversified Fund
|
NBI Growth
Portfolio
|
NBI Jarislowsky
Fraser Select Balanced Fund
|
NBI Jarislowsky
Fraser Select Income Fund
|
NBI Canadian
Diversified Bond Private Portfolio
|
NBI Canadian Bond
Private Portfolio
|
NBI Municipal Bond
Plus Private Portfolio
|
NBI Canadian Small
Cap Equity Private Portfolio
|
NBI Small Cap
Fund
|
Fund mergers on or about June 4,
2021
Terminating
Funds
|
Continuing
Funds
|
NBI U.S. Index
Fund
|
NBI U.S. Equity Index
Fund
|
NBI U.S. Currency
Neutral Index Fund
|
NBI International
Index Fund
|
NBI International
Equity Index Fund
|
NBI International
Currency Neutral Index Fund
|
NBI Emerging Markets
Fund *
|
NBI Diversified
Emerging Markets Equity Fund
|
NBI Tactical Mortgage
& Income Fund
|
NBI Floating Rate
Income Fund
|
NBI Strategic U.S.
Income and Growth Fund
|
NBI Unconstrained
Fixed Income Fund
|
NBI Global Bond
Fund
|
NBI Global Tactical
Bond Fund
|
Meritage Tactical ETF
Fixed Income Portfolio
|
NBI International
Equity Private Portfolio *
|
NBI SmartData
International Equity Fund
|
|
* Pre-Approved
Mergers.
|
** Each a class of
shares of National Bank Funds Corporation. These mergers will
require the approval of a special majority of securityholders of
National Bank Funds Corporation who vote at the special Meeting.
Each merger will not proceed unless the National Bank Funds
Corporation in its entirety approves the transaction.
|
The Terminating Funds listed above will be closed to new
subscriptions as of 11:59 p.m. on
March 1, 2021, with the exception of pre-established
systematic investment and distribution reinvestment plans, as well
as for certain discretionary management programs.
To facilitate certain mergers, NBI intends to create new series
for certain Continuing Funds. Certain of these series will only be
available to securityholders of the Terminating Funds and will be
closed to new subscriptions, with the exception of pre-established
systematic investment and distribution reinvestment plans.
If the proposed mergers are approved, securityholders of each
series of each Terminating Fund will receive units of a series of
the corresponding Continuing Fund that has a fee structure which is
substantially similar to the fee structure of the existing series.
The Terminating Funds will be wound up as soon as possible
following the mergers.
As required by securities regulation, NBI presented the conflict
of interest matters inherent to the proposed mergers to the
Independent Review Committee (IRC) of the NBI Funds. In the context
of its mandate, the IRC issued a favourable recommendation and/or
approval with respect to the policies proposed by NBI to address
these conflicts of interest. The IRC determined that the proposed
mergers achieve a fair and reasonable result for the applicable
funds. The costs and expenses associated with the mergers are being
borne by NBI, not the NBI Funds.
Should securityholders of NBI Real Assets Private Portfolio, NBI
High Yield Bond Private Portfolio, NBI Canadian Small Cap Equity
Private Portfolio and Meritage Tactical ETF Fixed Income Portfolio
vote against the relevant merger, these funds will be terminated on
or about June 18, 2021.
Fee reductions
In conjunction with the proposed fund mergers, NBI intends to
reduce the management fee and/or the administration fee charged in
respect of certain series of certain Continuing Funds as listed in
the tables below, to align with the fees charged to the
corresponding series of the Terminating Funds.
Management Fee Changes (effective on or about May 17, 2021)
Fund
|
Series
|
Current Management
Fee (%)
|
New Management Fee
(%)
|
NBI Conservative
Portfolio
|
Investor-2
|
1.25
|
1.22
|
NBI Global Tactical
Bond
Fund
|
Investor
|
1.70
|
1.60
|
Advisor
|
U.S.$-Advisor
|
T
|
U.S.$-T
|
R
|
Administration Fee Changes
(effective immediately)
Fund
|
Series
|
Current
Administration
Fee (%)
|
New Administration
Fee
(%)
|
NBI Small Cap
Fund
|
N
|
0.22
|
0.15
|
NR
|
NBI SmartData
International
Equity Fund
|
N
|
0.19
|
0.15
|
NR
|
Termination of H Series and FH Series of the NBI Strategic
U.S. Income and Growth Fund
NBI announced the termination of the H and FH Series of the NBI
Strategic U.S. Income and Growth Fund on or about May 19, 2021. The H and FH Series will be closed
to new subscriptions as of 11:59 p.m. on March 1, 2021
with the exception of pre-established systematic investment and
distribution reinvestment plans.
Fixed-rate administration fee
NBI also announced today that it will begin paying, on or about
May 19, 2021 (the "Effective Date"),
certain operating expenses of the NBI Jarislowsky Fraser Select
Income Fund and the NBI Jarislowsky Fraser Select Canadian Equity
Fund (the "NBI JF Funds") in return for the payment to NBI of a
fixed-rate administration fee by the NBI JF Funds. The fixed-rate
administration fee for every NBI JF Fund series will be less than
or equal to the actual operating expenses paid by such NBI JF Fund
series during its most recently completed financial year. As the
administration fee is a fixed percentage of assets, NBI will bear
the risk of any increases in operating expenses, but conversely, it
may also benefit from any future decreases in operating expenses.
By harmonizing its approach for the NBI JF Funds with the one used
by other NBI Funds, NBI seeks to improve and simplify its
investors' experience.
The introduction of these fixed-rate administration fees was
submitted to the IRC. The IRC considered the proposal and issued a
favourable recommendation with respect to the policies
proposed by NBI to address the related conflicts of
interest and determined that it would achieve a fair and
reasonable result for the NBI JF Funds.
Currently, the NBI JF Funds bear all of their operating
expenses. As of the Effective Date, the operating expenses payable
by NBI will include, but will not be limited to, legal fees, audit
fees, custodial costs, transfer agency and recordkeeping costs,
accounting and valuation fees, the costs of preparing and
distributing financial reports, prospectuses, annual information
forms, fund facts, continuous disclosure materials and other
investor communications and the costs of trustee services relating
to registered tax plans, as applicable. NBI will pay these
expenses, provided such expenses are incurred in the normal course
of business of the NBI JF Funds.
The fund costs that will continue to be paid by the NBI JF Funds
will include taxes, the costs of complying with any change to
existing regulatory requirements and/or with any new regulatory
requirements, including any new fees introduced after March 1, 2021, interest and borrowing costs, fees
and expenses related to external services that were not commonly
charged in the Canadian mutual fund industry as at March 1, 2021, fees and expenses of the IRC and
operating expenses that are incurred outside the normal course of
business of the NBI JF Funds.
Securityholders of all series of the NBI JF Funds other than the
Advisor Series and T5 Series will receive a written notice
providing the details of the introduction of the fixed-rate
administration fee, as required by securities regulations. The
Advisor Series and T5 Series securities of the NBI JF Funds require
securityholder approval prior to implement this change. Advisor
Series and T5 Series securities securityholders of record, on or
about April 1st, 2021,
will receive Meeting materials for Meetings to be held on or about
May 17, 2021.
The above changes will be reflected in the upcoming amendment to
the simplified prospectus for the NBI Funds, which will be
available on the SEDAR website (www.sedar.com) as well as on the
National Bank Investments website (www.nbinvestments.ca).
About NBI Funds
NBI Funds (the "Funds") are
offered by National Bank Investments Inc., a wholly owned
subsidiary of National Bank of Canada. Commissions, trailing commissions,
management fees and expenses all may be associated with investments
in the Funds. Please read the prospectus of the Funds before
investing. The Funds' securities are not insured by the Canada
Deposit Insurance Corporation or by any other government deposit
insurer. The Funds are not guaranteed, their values change
frequently and past performance may not be repeated.
About National Bank Investments
Inc.
National Bank
Investments Inc. (NBI) is an investment
funds management firm committed to manufacturing and offering
mutual funds, exchange-traded funds, investment solutions and
services designed to help Canadian investors pursue their financial
goals. As at December 31, 2020,
assets under management in NBI products were valued at over
$67 billion.
Guided by an open architecture strategy, NBI is dedicated to
providing diverse solutions to meet the evolving needs of its
clients. NBI consistently strives to be recognized as a key partner
by combining innovation and excellence. NBI's role is not limited
to administrative aspects of management; NBI Advisory Services and
its registered representatives form a team of specialists who
provide information and advice to help advisors build portfolios
adapted to their clients' financial needs. Follow NBI's activities
at nbinvestments.ca or via social
media such
as YouTube and LinkedIn.
National Bank Investments is a member of Canada's Responsible Investment Association
and a signatory of the United Nations-supported Principles for
Responsible Investment.
About National Bank of Canada
With $344 billion in
assets as at January 31, 2021, National Bank of
Canada, together with its
subsidiaries, forms one of Canada's leading integrated financial groups.
It has more than 26,000 employees in knowledge-intensive
positions and has been recognized numerous times as a top employer
and for its commitment to diversity. Its securities are listed on
the Toronto Stock Exchange (TSX: NA). Follow the Bank's activities
at nbc.ca or via social media such as
Facebook, LinkedIn and
Twitter.
SOURCE National Bank of Canada