Investors Group to improve fee certainty and transparency for investors
Fixed administration fee provides reduction in MERs for majority of funds
Winnipeg – June 28, 2007: Investors Group today announced that Fund securityholders will be asked to vote on a proposal to establish a fixed administration fee for most Investors Group mutual funds. As a result of this change, the management expense ratios (the “MERs”) for each series of units or shares of most Investors Group Funds will become more fixed and predictable going forward.
Implementing a fixed administration fee will change how operating expenses are charged to each Fund. Operating expenses presently comprise a portion of the MER that varies from year to year, making it difficult to predict the MER for most mutual funds in any given year. Investors Group will replace fund operating expenses with a fixed administration fee. Taxes (including GST), borrowing costs, Independent Review Committee costs and other costs for new regulatory requirements will continue to be charged to the funds.
Generally, fixed administration fee rates for unit trust and corporate class funds will be set by asset class and will range from 0.01 per cent (for money market Funds) up to 0.25 per cent for global equity and sector asset classes.
With this change, Investors Group will bear the applicable operating expenses of its Funds, in return for a fixed administration fee.
The fixed administration fee for each series has been set at a level that ensures that, had the fee been in place since October 1, 2006, all investors would have experienced the same or lower MER, compared with their Fund’s most recently published MER in March.
Generally, fixed administration fees for unit trust funds will be set by asset class as follows:
| Unit Trust Asset Class | Fixed Administration Fee Range |
|---|---|
| Money Market | 0.01% |
| Fixed Income | 0.13% to 0.16% |
| Balanced | 0.17% to 0.20% |
| Canadian Equity | 0.17% to 0.19% |
| US Equity | 0.18% to 0.20% |
| Global Equity | 0.18% to 0.20% |
| Regional / Sector / Specialty | 0.13% to 0.23% |
In conjunction with the implementation of a fixed administration fee, Investors Group intends to reduce the management fees on most of Investors Group’s global Corporate Class Funds by .05% to 0.10%. The combination of these changes would have resulted in the same or lower MERs for these 16 Corporate Class funds as compared to their most recently published MERs.
Management fees will be reduced by .05% for Investors North American Equity Class, Investors Global Class, Investors FI Global Equity Class, IG Mackenzie Cundill Global Value Class*, Investors European Equity Class, Investors European Mid-Cap Equity Class, IG Mackenzie Ivy European Class, IG AGF International Equity Class, IG Templeton International Equity Class, Investors Greater China Class, Investors Japanese Equity Class, Investors Pacific International Equity Class, Investors Pan Asian Growth Class, Investors Mergers & Acquisitions Class.
Management fees will be reduced by 0.10% for Investors Global Science & Technology Class, and Investors Global Financial Services Class.
It is anticipated that securityholders of record (as of August 2, 2007) for all participating retail series of the Investors Group Funds** will receive an information circular and proxy materials. A special meeting of investors for each participating Fund is expected to be convened on or about September 20, 2007 to vote on the proposal. If the proposal is approved, the fixed administration fee is expected to be in effect as of October 1, 2007.
* A preliminary simplified prospectus relating to the IG Mackenzie Cundill Global Value Class of Investors Group Corporate Class Inc. has been filed with certain Canadian securities commissions or similar authorities. You cannot buy shares of the fund until the relevant securities commissions or similar authorities issue receipts for the simplified prospectus of the fund.
**iProfile and non-retail funds and series are excluded from the proposal.
Investors Group, founded in 1926, is a national leader in delivering personalized financial solutions to Canadians through a network of over 4,000 Consultants located throughout Canada. In addition to an exclusive family of mutual funds and other investment vehicles, Investors Group offers a wide range of insurance, securities, mortgage and banking services. Investors Group is a member of the IGM Financial Inc. (TSX: IGM) group of companies. IGM Financial is one of Canada’s premier financial services companies with over $126 billion in total assets under management.
| For more information contact: | |
|---|---|
| Ron Arnst Media Relations (204) 956-3364 ron.arnst@investorsgroup.com |
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