Managed Money Reporter Newsletter — Issue 229, August 2006

Editors: Carl Spiess & Allan McGlade

Featured Articles

Back to school

With summer holidays ending, and kids heading off to school, it is time to think about some investment planning for the coming year.

With interest rate increases finally on hold in Canada and the US, new opportunities appear for bond investors. We continue to hear from managers and strategists who think that there are opportunities for Canadians to take some profits on Canadian investments and seek opportunities overseas. In any case, now is a good time to ensure your portfolio is balanced.

If you haven't had a recent account review from us, please contact us to set up a time to review your portfolio, either in person, at 1-800-387-9273 or by email to

Recommended reading: Investment Portfolio Quarterly

We are pleased to provide the link to ScotiaMcLeod's most recent investment portfolio quarterly. This issue looks at the potential end to interest rate increases, potential economic slowdowns, inflation risks, and, could it be true, lower oil prices?

GST down, MERs down

With the GST having dropped from 7% to 6%, the Management Expense Ratio on funds is going down too. While we still think that the Federal Government levying a consumption tax on people's investments is wrong, at least the tax is dropping. Figure on saving around $20 each year on a $100,000 portfolio due to the tax decrease. It is a small amount, but still good news and the Investment Funds Institute of Canada continues to lobby the Government to remove the GST from all investment management. Look for the lower MERs to be reported in next year's annual reports and data.

New ETFs for Canadian investors

Exchange Traded Funds have become more popular in the last few years. ETFs trade like stocks, and traditionally have closely followed a specific index through a passive management approach. ETFs have very low management fees making them good for long term investors who don't want to out or underperform the market. The original iShares are a popular family that have been available for many years.

Now a new family of actively weighted (as opposed to index weighted) ETFs are being offered by Claymore investments:

  • Claymore Global Fundamental Index ETF
  • Claymore US Fundamental Index ETF C$ hedged
  • Claymore Japan Fundamental Index ETF C$ hedged
  • Claymore Oil Sands Sector ETF
  • Claymore BRIC ETF
  • Claymore CDN Dividend & Income Achievers ETF

Both these new ETFs and the traditional market weighted ETFs are available in your ScotiaMcLeod account, so please contact us if you want to have a portion of your portfolio invested in this manner.

More on ETFs

Mutual Fund Reporter Recommended Website of the Month

Right now there is a material reason for us to recommend this site: you could win $500 and help build a better site and source of financial information for investors.

As you are aware, I hold the CERTIFIED FINANICAL PLANNER ™ (CFP™) credential. My licensing body, Financial Planners Standards Council (FPSC), has a terrific site and they are looking to make it even better with your feedback. Each month, logs more than 70,000 visits from financial planners and other industry representatives, members of the public and the media, students, educators and others. They have monthly articles, helpful information for consumers, and information about the process and profession of Financial Planning. The public resources include a learning centre with online quizzes where you can test your online IQ. With your help, will continue to provide valuable services as the most authoritative source on financial planning information in Canada.


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