Fund sales rise in November: IFIC

Related news Canadian fund sales exceeded $23B in February Mutual fund sales slump continued in November Overall mutual fund net sales reached $468.9 million in the month, pushing year-to-date net sales to $20.1 billion, IFIC reports. Once again, long-term funds led the way, totaling net sales of $1.2 billion in the month, whereas money market funds suffered net redemptions of $710.3 million. Year-to-date, long term net sales totaled $26 billion, and money market redemptions were $5.84 billion. Overall net sales were up notably from $282.5 million for the previous month, but they were significantly below last November’s net sales of $2.51 billion. Bond funds were the top selling asset class in November, with net sales totaling $1.67 billion, compared to net sales of $1.5 billion last month. This was offset by equity fund net redemptions of $1.70 billion, up from $1.52 billion last month. Balanced fund net sales in November totaled $1.04 billion, compared to net sales of $566.9 million last month. Total mutual fund assets under management at the end of the month were $772.6 billion, compared to $773.7 billion in the previous month; a decrease of $1.05 billion, or just 0.1%. Since the beginning of the year, total mutual fund assets have decreased by just 0.75%, from $778.5 billion. Mutual fund net sales rose in November, finishing just shy of $500 million, the Investment Funds Institute of Canada said Thursday. Long-term funds continued to generate net sales in November, while money market funds remained stuck with net redemptions. Mutual fund sales outpaced ETFs in September James Langton Share this article and your comments with peers on social media Keywords Fund salesCompanies Investment Funds Institute of Canada Facebook LinkedIn Twitter read more

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Rising investor demand for growth stimulus: Merrill

James Langton Tapping China’s rich retail market a costly proposition: Moody’s Investors make tactical shifts in anticipation of volatility Share this article and your comments with peers on social media The survey, which took place from May 4 to 10, after elections in France and Greece, found that nearly two-thirds of investors are concerned that Greece will be the source of a negative surprise this year, up sharply from 48% in April. Fewer investors are convinced that current monetary policy offers enough stimulus, Merrill notes, adding that expectations of additional stimulus from the European Central Bank are rising. Now, 60% of respondents expect the ECB to engage in more direct large-scale quantitative easing by the end of 2012 – up from 51% in April. This growing clamour for more stimulus comes as expectations of economic growth have fallen further, and as concerns about inflation have eased significantly, Merrill says. It reports that only a net 15% of the panel expects the global economy to strengthen in the year ahead, down from 28% in February. The proportion of investors predicting inflation to rise in the coming year fell to a net 2% from a net 21% in April. “Investors have eradicated hopes of growth and inflation that had built up in the early months of the year – and they are looking to policy makers for stimulus,” said Gary Baker, head of European equities strategy at BofA Merrill Lynch Global Research. In the meantime, asset allocators are increasing positions in cash and bonds while reducing exposure to equities, it finds. A net 28% are now overweight cash, up from 24% in April, and the net underweight in bonds has fallen to 33% from 48% a month ago. The proportion of asset allocators overweight equities is also down to a net 16% from 28%. Additionally, the appetite for commodities is down to its lowest level in seven months, Merrill says. A net 2% of the panel is now underweight commodities, compared with an 8% overweight in April. One bright spot is China, where investor hopes have continued to rise. Merrill says that a net 10% of the panel expects a stronger Chinese economy in the next 12 months, up from 4% a month ago. And, a net 32% of global investors say global emerging markets is the region they most want to overweight, up from 24%. An overall total of 234 panelists, with US$526 billion of assets under management, participated in the survey. Facebook LinkedIn Twitter Related news Amid growing fears about Greece and the prospects for the global economy, institutional investors are increasingly looking for governments to ramp up the stimulus once again. The latest BofA Merrill Lynch Survey of Fund Managers for May finds that a growing majority of global investors would like to see more stimulative fiscal policies. The proportion of global investors saying global fiscal policy is “too restrictive” has more than doubled to a net 23% from a net 11% in April, the firm reports. Factor investors remain confident despite market turmoil Keywords Fund managers,  Institutional investors read more

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SEC should encourage FINRA to review rules: report

The report notes that neither the SEC, nor FINRA, conduct retrospective reviews of the SRO’s rules. But, the GAO maintains that these sorts of reviews are useful, “as they allow agencies to assess the effectiveness of their rules”; and, it notes that some federal financial regulators, including the SEC, have begun pursuing plans to conduct retrospective reviews. “By not conducting these reviews, FINRA may be missing an opportunity to systematically assess whether its rules are achieving their intended purpose and take appropriate action, such as maintaining rules that are effective and modifying or repealing rules that are ineffective or burdensome,” the report says. Additionally, the report finds that the SEC has “conducted limited or no oversight of other aspects of FINRA’s operations, such as governance and executive compensation”. It says that the SEC indicates that the lack of oversight in this area is due to resource constraints, and that it has focused its resources on FINRA’s regulatory departments instead, as they have the greatest impact on investors. The report indicates that the SEC is in the process of enhancing and expanding its oversight of FINRA using a more risk-based approach. And, it notes that, while the SEC has followed some elements that are important in a risk-management framework, it says the SEC has not documented how it will implement all of the elements, “such as considering alternative oversight approaches and monitoring the effectiveness of its oversight.” “Incorporating these other elements will better position [the] SEC to prioritize evolving and varying risks, evaluate alternatives, and monitor its oversight efforts. Without such elements, [the] SEC may be missing opportunities to take a more comprehensive, risk-based approach in overseeing FINRA,” it concludes. The report notes that the SEC generally agreed with the GAO’s recommendations. A new report recommends that the U.S. securities industry self-regulators should be reviewing the efficacy of their rules to make sure they are producing the desired results, and that their oversight could be enhanced, too. The U.S. Government Accountability Office (GAO) Thursday released a report examining the U.S. Securities and Exchange Commission’s (SEC) oversight of the industry self-regulatory organization (SRO), the Financial Industry Regulatory Authority (FINRA). It concludes that the SEC should encourage FINRA to conduct retrospective reviews of its rules, and that the SEC should establish a process for examining those reviews. Share this article and your comments with peers on social media Keywords Self-regulatory organizationsCompanies Financial Industry Regulatory Authority James Langton IAP to focus on SROs, taskforce in 2021 Facebook LinkedIn Twitter When does poor service become a regulatory issue for online brokerages? Related news IIROC drops expanded OBSI reporting proposal read more

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IIROC bans rep for forgery

Keywords EnforcementCompanies Investment Industry Regulatory Organization of Canada The Investment Industry Regulatory Organization of Canada (IIROC) has permanently banned a Montreal broker for misrepresenting her credentials upon registration. On May 7, an IIROC hearing panel accepted a settlement sgreement, with sanctions, between IIROC staff and Nicole Arvanitakis. IE Staff Related news Share this article and your comments with peers on social media BFI investors plead for firm’s sale PwC alleges deleted emails, unusual transactions in Bridging Finance case Ms. Arvanitakis admitted that she violated IIROC rules by misrepresenting her credentials upon registration. Arvinatakis admitted that when she was employed at at the Montreal branch of HSBC Securities (Canada) Inc. and at CIBC World Markets Inc. in 2009-10, she intentionally led IIROC and the two firms to believe, notably by means of a forgery, that she met the specific education criteria to carry on the occupation of registered representative, knowing that this was false. Arvanitakis agreed to the following penalty: a fine of $10,000; and a permanent ban. She also agreed to pay IIROC costs in the amount of $5,000. Mouth mechanic turned market manipulator Facebook LinkedIn Twitter read more

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Credit unions ranked first in retail banking customer service

Fed plays limited role in assessing climate risks for banks Of all the financial institutions in Canada, credit unions continue to provide the best customer service, according to market intelligence firm Ipsos Reid. The results of the company’s 2012 Best Banking Awards in Canada, released on Thursday, recognize Canadian financial institutions with the top ranked customer service for personal banking experience. The rankings are based on quarterly surveys of Canadians, with a total of 43,202 household responses received this year. Facebook LinkedIn Twitter TD getting new head of private wealth, financial planning Canadian banks to focus on growth, spending and buybacks after strong second quarter Related news Credit unions (an aggregate of individual credit unions across the country) received the award for overall customer service excellence – an award they’ve received for eight consecutive years – along with awards in four other categories, including an award for financial planning and advice. BMO Bank of Montreal, Desjardins, RBC Royal Bank, Scotiabank and TD Canada Trust also received awards in the financial planning and advice category. ING DIRECT also stood out in the rankings, receiving awards in five categories. In a separate category of awards for the Big Five Banks, TD Canada Trust won awards in every category on a solo or shared basis, including the award for overall customer service excellence. This is the fifth consecutive year in which it has received all 11 awards. “In Canada we are fortunate to have a strong and successful banking system, not only because of its financial stability, but also because of the services and capabilities provided to us by our financial institutions,” said Ray Kong, senior vice president and global financial services practice leader at Ipsos Reid. Adrian Murphy, vice president at Ipsos Reid and author of the CSI study, noted that Canada’s financial sector has changed considerably since the Ipsos Reid study began 25 years ago. “In that time, we’ve seen changes in technology, competition and consumer behaviour drastically impact the way Canada’s financial institutions operate, and in particular, their awareness of and attention to the role of customer service,” he said. “The Best Banking Awards recognize and celebrate those financial institutions which have excelled in their commitment to customer satisfaction.” Select award recipients among all financial institutions: Customer Service Excellence: Credit Unions Value For Money: PCF President’s Choice Financial Interest Rates & Service Charges: ING DIRECT Products & Services Excellence: ING DIRECT Financial Planning & Advice: BMO Bank of Montreal, Credit Unions, Desjardins, RBC Royal Bank, Scotiabank, TD Canada Trust Branch Service Excellence: Credit Unions Online Banking Excellence: ING DIRECT Select award recipients among the Big Five Banks: Customer Service Excellence: TD Canada Trust Value For Money: BMO Bank of Montreal, TD Canada Trust Interest Rates & Service Charges: TD Canada Trust Products & Services Excellence: RBC Royal Bank, TD Canada Trust Financial Planning & Advice: BMO Bank of Montreal, RBC Royal Bank, Scotiabank, TD Canada Trust Branch Service Excellence: RBC Royal Bank, TD Canada Trust Online Banking Excellence: RBC Royal Bank, TD Canada Trust Keywords Banking industry,  Awards Share this article and your comments with peers on social media Megan Harman read more

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Women in Capital Markets looks for new leadership

Women in Capital Markets (WCM), a non-profit organization that promotes the entry, advancement and development of women in the Canadian capital markets, announced Monday that Martha Fell is retiring from her role as CEO. “Martha has been a passionate champion of this organization over the past five years as its first CEO”, said Kathryn Smith, chairwoman, WCM. “Under Marthas leadership, WCM has achieved many milestones: doubling its membership base, tripling its events and strengthening its relationships with Canada’s largest capital markets’ employers. She led an innovative sponsorship campaign which helped build our brand across this industry as well as raise awareness for the business case for advancing women. We admire her dedication and are thankful for her invaluable contributions.” Sheila Murray to retire from CI Financial in March Related news Fell will remain CEO with the organization through the transition period. “The past five years have been incredibly rewarding and I look forward to remaining involved and continuing to seek an outlet for my passion for advancing women,” said Fell. The board of directors of WCM has commenced the search for new leadership. Share this article and your comments with peers on social media BMO announces executive retirements IA Financial chief Yvon Charest announces his retirement Keywords Resignations and retirementsCompanies Women in Capital Markets Facebook LinkedIn Twitter IE Staff read more

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Banks dropped from FSB list will maintain strong capitalization: Fitch

U.S. action on climate benefits banks, asset managers: Moody’s But, regardless of whether banks are on the systemically important list or not, the rating agency says that it expects global banks to target capitalization in line with their peers. “A bank may be downgraded below peers if it is unable to bolster and maintain capitalization in line with its peer group,” it says. Global systemically important banks are required to hold additional capital buffers ranging from between 1% and 3.5% above the 7% Basel III minimum, although none of them are required to hold the 3.5%. However, Fitch observes that the large global banks are now targeting Common Equity Tier 1 ratios of at least 10%, which it says sets a benchmark for others. “Banks around the world… continue to improve their capitalization. Together with Basel III, market and peer pressure, the capital surcharges will ensure that safe capital buffers are built and maintained. However, we expect returns on equity to run at a lower level for banks than they have historically as a result of the heightened capital buffers,” it says. James Langton Share this article and your comments with peers on social media Facebook LinkedIn Twitter High debt levels threaten banks’ strong results: Fitch G7 tax pledge may be upstaged by CBDC work Peer pressure, along with regulatory changes, will push global banks to maintain strong capitalization, says a new report from Fitch Ratings. Last week, the Financial Stability Board (FSB) released its updated list of banks that are considered globally systemically important. Three banks were dropped from the list, and two were added. Fitch said it expects the three banks leaving the list to maintain good levels of capitalization, which it says “will be important if they are to improve their credit ratings and maintain access to the funding markets without depending on extraordinary state support.” Related news Keywords Banking industry read more

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Debt, equity issuance decline in first quarter

Markit prices IPO at US$24 a share Share this article and your comments with peers on social media Canadian equity and equity-related issuance took an even harder hit, down 37% from the first quarter of 2012, and off by 29% from the fourth quarter of 2012. Issuance totaled $5.7 billion from 80 issues, it says. On the equity side, the real estate sector led the way with a 30% market share, generating overall equity proceeds of $1.7 billion. The energy and power sector ranked second with a 25% share, and financials had a 20% share. Thomson Reuters reports that the top equity underwriter of the first quarter was BMO Capital Markets, which ranked first in Canadian equity & equity related deals, secondary offerings, Canadian common stock & trusts, initial public offerings (IPOs) and retail structured products. RBC Capital Markets ranked first in preferred securities. The vast majority of new issuance in the first quarter came in secondary offerings, totaling $4.6 billion on 64 deals. Although, this is still down 38.6% from the same quarter last year, and down 23.8% from the previous quarter. Retail structured product issuance was down 30% from the same period last year, and preferred issuance was down 10.7%. On the debt side, Thomson Reuters reports that TD Securities led the underwriting league tables in overall Canadian debt and Canadian domestic corporate debt, while RBC Capital Markets was the top underwriter in Canadian government debt and for cross border deals. Government and agency debt continues to make up the majority of new debt issuance, representing a 62% share of overall issuance. Financials and telecoms ranked second third, respectively, with 23% and 7% market shares. Facebook LinkedIn Twitter RBC top equity underwriter for 2015: report HFT firm Virtu Financial plans IPO Keywords Share offerings Related news The Canadian investment banking business didn’t get any easier in the first quarter, with both debt and equity issuance declining, according to the latest data from Thomson Reuters. The firm reports that overall debt issuance (excluding self-funded deals), was down a bit in the first quarter, declining 3% compared with the same quarter in 2012, to $38.8 billion. Compared with the prior quarter, issuance was down 19%. James Langton read more

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Investors need to re-think current asset allocations: Russell

Will exuberant market sentiment last? Related news Share this article and your comments with peers on social media Keywords Investment strategies,  Asset allocationCompanies Russell Investment Group When the world caught Covid, diversified investors stayed healthy “While recent experience has been kind to conservative investors, no trend is indefinite and investors will need to look beyond global uncertainties and rethink their approach to asset allocation in favour of more broadly diversified, multi-asset solutions,” he says. Russell’s latest research argues that intelligently diversified multi-asset solutions, which go beyond traditional stocks and bonds, will be crucial to achieving longer-term objectives. “It’s not about increasing ‘risk exposure’ but improving ‘growth exposure,’” adds Kshatriya. “Investors need to look at adding non-traditional asset classes such as global infrastructure and real estate, high yield bonds and emerging markets debt, which can provide an additional layer of diversification that may not be represented in the more traditional approaches.” Specifically, the research suggests that broader diversification comes in three ways: Improving the global macro focus by adding exposure to global and emerging markets equities. Fixed income exposure should become considerably more global with the inclusion of emerging markets debt and global high yield bonds. “Real assets” such as global infrastructure, global real estate and commodities provide additional sources of income, diversification and potential inflation protection. IE Staff With bond yields low and rising, what is the price of safety? Continued political and economic ambiguity will force investors to actively manage the risk in their portfolios if they wish to achieve their investment objectives, suggests new research from by Russell Investments Canada. “There are macro forces at play that were not on the radar five years ago,” according to Shailesh Kshatriya, associate director, client investment strategies, Russell Investments Canada. Facebook LinkedIn Twitter read more

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Carney offers Canada parting advice on economy

Canadian trade deficit grew in October Ross Marowits Rejecting suggestions of being a “rock star central banker,” Carney credited a team of people that made crucial decisions. “I really don’t think you should judge your own legacy,” he said, adding it will take time for a full evaluation to emerge. Carney described his tenure during the financial crisis as being “very intense for a very long period of time.” “I think by and large the right decisions were made.” The central banker said Canada can seize opportunities to build a better future more than other countries because it doesn’t have to repair the economy or worry about getting out of trouble. But, he said, Canada is less well-oriented to the sources of global growth than it has been in the past. It must focus more carefully on exports and business investment, Carney said. He calculated that exports are currently $130 billion less than would have been the case in a typical postwar recession. That represents about eight per cent of gross domestic product. Carney said the Canadian government is correct in seeking out new trade deals, particularly in emerging economies, because they represent one half of the world’s imports growth and also are essential to securing a position in global supply chains. “To find and compete in new markets will require a concerted, multi-year effort by workers, firms and governments.” Carney has long stressed the need to transition Canada’s exports-based industries from reliance on slow-growing economies like the U.S. and Europe to fast-growing markets in China and Asia in general. But the advice took on added currency as it was likely the last time he will pronounce generally on the Canadian economy for at least the next five years, the term of his posting in London. Canada coped relatively well to the financial crisis, he said, noting that by the start of 2011 the country had recovered to the GDP level it held prior to the recession and that as of now, there are 480,000 more Canadians working than in the fall of 2008, when the slump began. It has been able to make the adjustments because fundamentally the Canadian system works, Carney said. Despite criticism, Canada’s labour market is relatively flexible, with labour mobility similar to that in the United States and about four times as flexible as in Europe. “Canadians are going where the jobs are,” he said. “Last year, there was a net inflow of more than 40,000 people into Alberta from the rest of Canada, a level of mobility that approaches its previous peak.” Carney said Canada also has a functioning monetary union despite the lament about provincial trade barriers and the two-speed economy caused by high commodity prices. He also praised what he calls “fiscal federalism,” the often maligned system of wealth transfers from have to have-not regions. Rather than a weakness, the system helps stabilize localized “asymmetric shocks” and share the risks, he said. Lastly, the central banker said Canada has been well-served by a sound and regulated banking sector, as well as low government debt that allowed policy-makers room to borrow on global markets to stimulate the economy. Carney said Canada cannot rest on its laurels, however. “In a rapidly shifting world, only sustained education, ingenuity and investment can maintain competitiveness,” he said. “This means we must continuously invest in our workforce. With technology and trade transforming the workplace, the need to improve skills across the spectrum of work has never been greater.” With files from Julian Beltrame in Ottawa Purchase of three icebreakers turns Canada’s August trade surplus into a deficit Canada has work to do, but it is stronger than when he took over as head of the Bank of Canada five years ago, outgoing governor Mark Carney said Tuesday. “We’re in a stronger relative position compared to other advanced economies today than we were in 2008 but we’re in a tougher world,” he said after making his final speech as governor before departing for the Bank of England next month. Higher oil prices helped narrow Canada’s trade deficit to $4.2B in January Share this article and your comments with peers on social media Related news Keywords ExportsCompanies Bank of Canada Facebook LinkedIn Twitter read more

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