Manulife has announced:
that Manulife has signed an agreement to acquire AIC’s Canadian retail investment fund business.
Under the agreement, Manulife Mutual Funds would manage all AIC funds in Canada and AIC would continue to act as a fund sub-advisor for Manulife Mutual Funds.
Once complete, the acquisition of AIC Limited’s retail investment fund business by Manulife Financial will create significant scale and presence for Manulife’s individual wealth management business across Canada.
At AIC Limited, key members of its portfolio management team will return to their asset management roots by creating a sub-advisory business focused on high net-worth individuals, plus will continue to act as a sub-advisor for Manulife Mutual Funds.
The businesses based in Burlington and Toronto, Ontario currently have almost $13.7 billion* in combined investment funds assets under management across Canada.
“plus will continue to act …”? Oh, well, the doctors say I have to learn to let these things go.
Investment management for the following AIC-managed and sub-advised funds will remain in place for the time-being, but Manulife Mutual Funds will review the line-up to determine the most appropriate next steps. The result of this review should be available shortly:
AIC Trust Funds:
- …
- AIC Preferred Income Fund
- …
AIC Preferred Income Fund is rather interesting. Their promotional material states:
Why a preferred income fund?
Preferred shares are safer than common stocks not simply because they typically rank higher up the capital structure but also because traditionally only Canada’s largest public companies can earn access to the preferred market. AIC’s familiarity with all of those issuers increases the chances that AIC Preferred Income Fund will come to own the best of those issues.
A diversified portfolio of preferred shares and other attractive income-producing investments is a prudent choice for many investors. But choices are many and attention to the detailed terms, nuances and credit ratings of each issue/issuer is absolutely required. Ownership of the AIC Preferred Income Fund is simply an easier alternative … let us do the management and monitoring of the portfolio for you.
AIC Preferred Income Fund offers tax-advantaged income at a high current yield with relative safety in a single decision purchase. With an emphasis on dividend-paying preferred shares, AIC Preferred Income Fund delivers a steady stream of monthly income subject to lower tax rates relative to fixed income instruments (held outside a registered account). For investors at the highest marginal tax rates, in all provinces, after–tax returns on dividends exceed after–tax income returns from bonds or bond funds of similar current yield (held outside a registered account). And for many investors in lower tax brackets dividend income (held outside a registered account) can actually be completely free of tax. Distributions from the Fund may consist of dividends, capital gains, interest and/or return of capital.
AIC Preferred Income Fund provides you attractive current yield and tax efficiency.
… which is all very good, although more details supporting the statement AIC’s familiarity with all of those issuers increases the chances that AIC Preferred Income Fund will come to own the best of those issues. would have been most interesting.
Of additional interest is their statement of holdings reported by Morningstar:
Zeus Receivables Trust 8.7
Diversified Trust 6.8
Ridge Trust 5.8
Darwin Receivables Trust 5.8
Sun Life Finl 4.9
Canadian Master Trust 4.8
TORONTO DOMINION BK ONT 4.8
Bk Montreal Que Pfd 4.8
BANK N S HALIFAX 4.8
CANADIAN IMPERIAL BK COMM TORONTO ONT 4.8
Zeus Receivables is bank sponsored ABCP.
Diversified Trust is bank sponsored ABCP.
Ridge Trust is bank sponsored ABCP.
Darwin Receivables Trust is bank sponsored ABCP.
Canadian Master Trust is bank sponsored ABCP.
[…] This may be related to the AIC deal with Manulife. […]