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Big Six banks expand investment offerings – Wealth Professional

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“ZMMK provides a solution for investors looking for a liquidity sleeve, or a place to hold their cash as they assess the market for other investments,” Mark Raes, head of Product at BMO Global Asset Management, said in a statement.

Meanwhile, CIBC has again expanded its lineup of Canadian Depositary Receipts (CDRs), which offer an affordable way to invest in some of the world’s largest companies with a built-in notional currency hedge, with eight new listings on the NEO Exchange.

The new CDRs include:

  • Advanced Micro Devices Canadian Depositary Receipts (CAD Hedged) – AMD
  • Berkshire Hathaway Canadian Depositary Receipts (CAD Hedged) – BRK (underlying shares Berkshire Hathaway Inc. Class B Common Stock (NYSE: BRK.B))
  • Costco Canadian Depositary Receipts (CAD Hedged) – COST
  • Salesforce.com Canadian Depositary Receipts (CAD Hedged) – CRM
  • IBM Canadian Depositary Receipts (CAD Hedged) – IBM
  • JPMorgan Canadian Depositary Receipts (CAD Hedged) – JPM
  • Mastercard Canadian Depositary Receipts (CAD Hedged) – MA
  • Pfizer Canadian Depositary Receipts (CAD Hedged) – PFE

They join 10 other CDRs that were launched on NEO in July and October. According to NEO, the average number of client trades in CDRs grew from around 700 per day in September to roughly 5,500 since the start of November. The CDRs on the exchange have also continued to track their underlying stocks precisely even during highly volatile periods.

“We are pleased with the reception we’ve seen so far for CDRs with Canadian investors. It’s clear this meets a need in the market,” said Elliott Scherer, managing director and head of Sales, Wealth Solutions Group, CIBC Capital Markets. “This expansion of our CDR offering provides greater opportunity for investors to diversify their portfolio without being exposed to currency risk at a fraction of the price per share.”

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Ford sees $8.2 billion gain on its investment following Rivian’s IPO – Driving

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Ford continues to gain, despite abandoned plans to jointly develop an EV with the startup

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Ford Motor Co. expects to record a gain of $8.2 billion in the fourth quarter on its investment in RivianAutomotive Inc. after the electric-truck maker’s blockbuster initial public offering late last year.

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The legacy automaker disclosed the gain Tuesday along with several special items it intends to report when Ford releases earnings on Feb. 3. The Dearborn, Michigan-based company will also reclassify a non-cash gain of about $900 million on the Rivian investment from the first quarter of last year as a special item, meaning it will be excluded from the full-year adjusted results, according to a statement.

The disclosures show Ford continues to gain from its connection to the startup even after the auto giant exited Rivian’s board in September and subsequently announced it had abandoned plans to jointly develop an electric vehicle. Ford, which has invested a total of $1.2 billion in Rivian since early 2019, has a 12 per cent stake that the company has said was valued at more than $10 billion in early December.

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  1. Rivian delays big battery packs to prioritize more deliveries

    Rivian delays big battery packs to prioritize more deliveries

  2. Tesla doubles down on accusations rival Rivian stole its battery secrets

    Tesla doubles down on accusations rival Rivian stole its battery secrets

Since a November listing that was the largest IPO of 2021, Rivian has been on a roller coaster. The shares peaked at more than $172, but have tumbled 57 per cent since then as the company faced new competition in the electric-vehicle market. Rivian was briefly valued at more than $100 billion, then more valuable than Ford, but Ford has subsequently reclaimed the lead after it topped $100 billion in value for the first time last week.

Ford shares were little changed in after-hours trading Tuesday in New York, while Rivian climbed less than one per cent.

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ByteDance reorganizes strategic investment team, causes panic – Yahoo Movies Canada

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What a roller coaster day for China’s tech industry. TikTok’s parent company ByteDance has dissolved its strategic investment team, sending worrying messages to other internet giants that have expanded aggressively by investing in other companies.

At the beginning of this year, ByteDance reviewed its “businesses’ needs” and decided to “reduce investments in areas that are not key business focuses,” a company spokesperson said in a statement.

ByteDance isn’t halting external investments outright, though; instead, the investment team will be “restructured” and “integrated across the various business lines to support the growth” of its business.

In other words, some members from its strategic investment team, which has backed 169 companies, according to Chinese startup database IT Juzi (some deals may not be public), will be reassigned roles in other business departments and continue to invest there.

The “restructuring” still stirred up a wave of panic in the industry. China’s cyberspace regulator has drafted new guidelines that will require its “internet behemoths” to get its approval before undertaking any investments or fundraisings, Reuters reported, citing sources. Some Chinese media outlets also reported similar drafted rules.

“Behemoths” refer to any internet platform with more than 100 million users or more than 10 billion yuan ($1.58 billion) in revenue, said Reuters’ sources. That rule, if true, will put a slew of Chinese internet giants, from Tencent, Alibaba, Pinduoduo, JD.com to Baidu, under regulatory review for their investment activities. Tencent in particular is famous for its expansive investment portfolio, which earns it the moniker “the SoftBank of China.”

In a surprising turn, China’s cyberspace regulator said that the “rumored guidelines for internet companies’ IPO, investment and fundraising are untrue.” Furthermore, the authority will “investigate and hold relevant rumormongers responsible in accordance with the law.”

ByteDance’s motive for restructuring may indeed be to generate more synergies between its external investments and internal businesses. We don’t know for sure yet. But there are signs that China’s antitrust action on its internet darlings are nowhere near the end.

Tencent recently sold a great chunk of its shares in two of its most important allies, Chinese online retailer JD.com and Singaporean video games and e-commerce conglomerate Sea. While antitrust pressure wasn’t cited as the cause for its divestments, speculation is rife that China is continuing to blunt the monopolistic power of its largest interent platforms. A handful of them have received various degrees of fines for violating anticompetition rules, but a pause on their investment game will carry much greater consequences. The question now is who’s next.

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CSA shines a light on greenwashing – Investment Executive

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Greenwashing has become an issue for regulators who worry that investors could be intentionally or inadvertently misled about the green credentials of the funds they buy.

“In addition to leading investors to invest in funds that do not meet their objectives or needs, greenwashing may also have the effect of causing investor confusion and negatively impacting investor confidence in ESG investing,” the CSA warned in its notice setting out the new guidance.

The regulators reported that targeted reviews of investment funds’ continuous disclosure in this area revealed a number of shortcomings. Some funds had potentially misleading disclosure, the CSA found, while others featured inadequate reporting to investors on investment strategies, proxy voting practices and ESG performance.

Many funds “lacked detailed disclosure” about the specific ESG factors considered in their investment strategies and how those factors are evaluated.

Regulators also found that many funds provided more detailed ESG disclosure in their marketing materials than in their prospectuses; that most funds didn’t detail portfolio changes that were driven by ESG considerations; and that more than half of the funds that use proxy voting as part of their ESG strategies didn’t set out specific voting policies.

“In addition, the vast majority of the funds reviewed did not report on their progress or status with regard to meeting their ESG-related investment objectives,” it said.

In the wake of that review, the regulators indicated they don’t believe current disclosure requirements need to be revised to specifically address ESG factors. However, the CSA said “regulatory guidance is needed to clarify how the current disclosure requirements apply to ESG-related funds and other ESG-related disclosure in order to improve the quality of ESG-related disclosure and sales communications.”

The new guidance doesn’t add requirements for fund managers, but it does provide insight into areas where firms may be falling short of meeting existing disclosure expectations.

On the issuer side, the CSA is consulting on proposed new climate risk disclosure requirements for public companies.

For investment funds, the regulators are hoping that guidance will be enough by bringing “greater clarity to ESG-related fund disclosure and sales communications to enable investors to make more informed investment decisions.”

Among other things, the guidance recommends that funds that aim to generate a measurable ESG outcome report their results to investors.

“For example, where a fund’s investment objectives refer to the reduction of carbon emissions, investors would benefit from disclosure in the fund’s [performance report] that includes the quantitative key performance indicators for carbon emissions,” it said.

On marketing materials, the CSA said that “a sales communication that does not accurately reflect the extent to which a fund is focused on ESG, as well as the particular aspect(s) of ESG that the fund is focused on, would both be misleading and conflict with the information in the fund’s regulatory offering documents.”

It also said that the use of fund-level ESG ratings, scores or rankings may be misleading. Reasons include conflicts with the rating provider, cherry-picking positive scores, and failing to disclose qualifications or limitations to a rating or ranking that would supply added context.

“Interest in ESG investing is on the rise and this enhanced and practical guidance will play an important role in helping investors make informed decisions about ESG products, as well as preventing potential greenwashing,” said Louis Morisset, chair of the CSA and president and CEO of the Autorité des marchés financiers (AMF), in a release.

The CSA indicated that it will continue to review ESG-related disclosures as part of its continuous disclosure reviews.

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