TORONTO — CI Financial Corp. says it’s continuing to build its U.S. presence through the acquisition of a majority stake in One Capital Management, a registered investment adviser based in California.
The companies didn’t announce the value of CI’s investment or the size of its majority holding once the deal closes.
But Toronto-based CI Financial says One Capital’s expertise in wealth management fits its plan of expanding and updating its wealth management advisory services.
Among other things, One Capital has specializations in family office, or ultra high-net-worth, services.
It also has a division focused on the needs of professional athletes and entertainers.
CI announced in November that it would acquire a majority interest in Surevest Wealth Management, a registered investment advisory firm based in Phoenix, Arizona.
This report by The Canadian Press was first published Dec. 23, 2019.
Companies in this story: (TSX:CIX)
Types of Investment Funds: Explained – Investment U
What is an Investment Fund?
An investment fund pools together capital from many investors. Each investor has partial ownership and the fund invests according to the fund’s objectives. Investment funds offer a wide range of investment opportunities. They can also benefit from diversification, lower transaction costs and management expertise. This can help mitigate some of the risk that individual investors take on.
Types of Investment Funds:
These fund types serve similar purposes, fundamentally. They allow you to invest in a diversified portfolio of assets that you might not otherwise be able to gather yourself. But it’s important to understand the features that make each fund type unique.
Open-End vs Closed-End Funds
Open-end funds, like those offered by Fidelity, Vanguard and other leading mutual fund groups, continuously offer and redeem shares based on each day’s closing net asset value. Share’s are priced each day based on their net asset value (NAV).
Closed-end funds are different. They raise money on an IPO (initial public offering), just like a company going public, and then begin trading on an exchange.
Because these funds trade like stocks, you buy them through a brokerage account. And you can trade them intra-day using market orders, limit orders, or stop orders. They are marginable like stocks, too.
A closed-end fund’s market price at any given time may be higher or lower than its net asset value. If it is trading above the net asset value, it is said to be trading at a premium. If it is trading below the net asset value, it is trading at a discount.
Mutual funds are the oldest type of investment fund. Like the other types, they’re vehicles that pool money from investors to buy securities. The basket of assets is priced and sold to the public on a daily basis.
The daily basis part is an important distinction. Unlike the other fund types that we’ll discuss in a moment, the price of a mutual fund changes exactly once a day. In an actively managed mutual fund, the managers may trade the assets inside the fund throughout the trading day. But you can’t make money trading shares of the fund intraday.
That’s part of the reason mutual funds are more popular for retirement planning. They’re not good for day traders, but they’re great for savers who want to grow their money over a long period of time.
Mutual funds come in a few flavors. Closed-end mutual funds are the simplest type. They have a fixed number of shares that can be bought or sold only when they’re available on the market. There are also open-end funds, which can create and retire new shares based on investor demand. And then there are unit investment trusts (UITs), which are static portfolios of securities with no management.
Mutual funds have many advantages. They allow investors to buy into a diversified portfolio of high-value assets without having to manage that portfolio. However, that convenience comes at a price… Mutual funds (especially actively managed ones) often charge fees that may eat away at returns.
Another disadvantage of mutual funds is their tax inefficiency. Money in a mutual fund is usually tax-exempt as long as it stays invested. But when a mutual fund sells some of its portfolio at a profit, it is required by law to distribute those profits to shareholders. Those payments are taxable.
ETFs (Exchange-Traded Funds)
An ETF is a listed security that tracks an index consisting of a portfolio of individual securities. As with mutual funds, when you buy an ETF, you don’t pick a specific security. Instead, you choose a particular asset class, sector, theme, country or investment strategy.
Two notable types of ETFs are leveraged ETFs (which track some multiple of the price of their underlying assets) and inverse ETFs (which track the opposite of their underlying assets). These funds give traders the ability to amplify or hedge their bets without using complex instruments like derivatives.
The ability to trade ETFs intraday can be an advantage in some situations. If the market crashes, for example, you can sell before the end of the trading day. With a mutual fund, you’re stuck waiting until 4 p.m. to sell, at which point the fund may have shed significant value.
But the ability to trade actively can also be a handicap. Those who trade frequently risk trading on impulse or anxiety. And that’s a recipe for buying high and selling low. Mutual funds don’t give you the option of making reckless intraday trading decisions.
With ETFs, you can invest in everything from stocks, bonds and the U.S. technology sector to Dividend Aristocrats, Russian small caps and even timber. ETFs also offer distinct advantages over traditional mutual funds…You can buy and sell ETFs as easily as you buy a share of Apple (Nasdaq: AAPL).
Finally, ETFs tend to be a bit cheaper than mutual funds. They don’t have to distribute realized capital gains to shareholders, so they tend to come with a smaller tax bill. Also, many ETFs are passively managed, which means a lower expense ratio.
ETFs don’t have big investment minimums. They’re generally more tax-efficient. And you can invest in ETFs that offer leverage or even profit when markets go down. No wonder ETFs have come to dominate stock exchanges over the past decade.
Hedge funds pool huge amounts of money from wealthy investors, Wall Street banks, and, yes, other hedge funds. Their goal is to make money regardless of which way the stock market goes. Some of them invest in bonds, some in commodities, some in foreign markets, some in futures and options. Some short stocks, betting their prices will fall, not rise.
Others turn almost any kind of cash flow – including credit card payments, home mortgages, corporate loans, plane leases, and even movie theater revenue – into securities and trade them. Hedge funds hold unparalleled sway over the world’s financial markets today. They are responsible for a good chunk of all stock trading in the market.
Much of what they are doing is good. For example, hedge funds help spread investment risk among many partners. In some ways, this “risk dispersion” has acted like a safety valve for investment banks and other lenders. However, with so much leveraged money sloshing around in these funds, the potential for catastrophe is increasing. Also, hedge funds are struggling to beat the market but still charge higher fees.
Index funds aren’t their own type of fund. For example, there are both ETFs and mutual fund index funds. Still, they’re worth discussing because they have a unique asset profile.
As the name implies, index funds are baskets that try to contain all the securities in a particular index. You could spend a fortune buying a weighted amount of stock in the 500 largest public companies in America… or you could just buy a few shares of an S&P 500 index fund.
Index funds represent some of the most diversified investment vehicles on the market. Instead of picking and choosing different securities, you get a piece of everything. This strategy can generate a steady returns with lower risk.
Index funds can be valuable to long-term investors because of their simple strategy. Betting on the market’s long-term trends can be a great move.
Few active managers and traders outperform the benchmark indexes over a period of decades. However, an actively managed fund may earn bigger short-term gains than an index fund would.
Types of Investment Funds Summarized
As you can see, mutual funds, ETFs, hedge funds and index funds are all similar concepts, but there are a number of nuanced differences between them. These are important to understand for any investor.
The Investment U Research Team is dedicated to finding the best investment opportunities across all sectors and regions. To learn more about different types of investment funds, Sign-up for our free e-letter below.
Three Saanich councillors ask for $2-M investment into District road safety – Saanich News
Three Saanich councillors are proposing that the District invest $2 million in road safety upgrades.
Couns. Rebecca Mersereau, Ned Taylor and Zac de Vries submitted a report to council highlighting a need for investment into improved road safety infrastructure in Saanich.
— Rebecca Mersereau (@RJMersereau) January 16, 2020
In the report, the councillors acknowledge that there are several factors that contribute to Saanich residents’ road safety concerns including road speeds, parking and inadequate infrastructure for vulnerable road users. They pointed out that the financial aspects of increasing road safety are a barrier but are within council’s control.
Saanich’s transportation network needs to make sense for all road users, reduce the need for a car and ensure residents’ safety, Taylor explained. He feels the current network doesn’t do that.
“There are lots of roads in Saanich where it’s actually quite dangerous to walk or bike along,” he said.
De Vries agreed, noting that residents have been voicing concerns about road safety in the District since before the election.
Taylor explained that the Active Transportation Plan (ATP) is strong but that the 30-year timeline means residents will need to wait too long for safer roads.
The councillors acknowledge that $2 million is a large sum, but note that investing in “necessary infrastructure” is expensive.
Just one metre of sidewalk costs $1000, Taylor noted, and District staff told the councillors it would cost upwards of $12 million per year to cut the ATP 30-year timeline in half – which they say Saanich taxpayers can’t afford.
Mersereau explained that “meaningful improvement” can still be made with $2 million. In the report, it’s noted that $2-million is enough to construct about 2 kilometres of sidewalks, 20 new sidewalks or fund projects to add speed radar devices, regulatory signage and crosswalk and sidewalk improvements to streets that require them most. The ATP provides a framework for prioritizing upgrades, Mersereau noted.
While speeding up the ATP is a priority, Taylor explained that investing in road safety aligns with Saanich’s strategic plan in at least eight ways – one of which is to work towards a goal of carbon neutrality by 2030. Increased road safety infrastructure could help reduce the District’s greenhouse gas emissions by giving people the opportunity to travel through Saanich without a car.
Mersereau is pleased with the feedback from residents so far and is “feeling positive” about having the report come to council. She feels it will enable an important discussion.
“This is a priority for the three of us and I hope for the rest of council,” Taylor said. “We’re eager to get this work done.”
Although he feels optimistic about Monday’s meeting, de Vries acknowledged that they can’t predict what the final 2020 budget will look like as “tough decisions” are made during budget deliberations.
‘Sweeping generalizations’ on oil and gas investment breeds Western alienation – Yahoo Canada Finance
Brad Wall is calling on institutional investors to avoid “sweeping generalizations” about Canada’s energy sector, as a growing number of asset managers prioritize climate change.
The former Saskatchewan premier said blanket statements about energy and the fossil fuel divestment movement are peaking feelings of Western alienation. His comments come as Canadian energy producers face mounting pressure to disclose climate-related risk, and they race to cut their carbon footprints.
“I think it would be better for business if sweeping generalizations were replaced by a process that would identify those that have a lot more work to do and shouldn’t be targets for investment,” Wall told a lunch audience at the AltaCorp Capital Annual Investor Conference in Toronto on Thursday.
“But also, [highlight] the companies that are champions and world leaders and are contributing to the fight on climate change, even as oil and gas companies,”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="He points to carbon capture efforts at Whitecap Resources (WCP.TO), the Calgary-based oil and gas firm where he’s held a board seat since July. The company estimates its carbon sequestration efforts offset all of its corporate emissions.” data-reactid=”26″>He points to carbon capture efforts at Whitecap Resources (WCP.TO), the Calgary-based oil and gas firm where he’s held a board seat since July. The company estimates its carbon sequestration efforts offset all of its corporate emissions.
“There is a broader story than just Whitecap,” Wall said. “We have to take every opportunity to tell those stories.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Last July, Canadian Natural Resources (CNQ.TO)(CNQ), Canada’s largest oil and gas producer, announced it cut greenhouse-gas emissions by 29 per cent and methane emissions by 78 per cent since 2012. Earlier this month, Cenovus Energy (CVE.TO)(CVE) announced a plan to reduce per-barrel greenhouse gas emissions by 30 per cent by the end of 2030. Those figures do not include emissions from the consumption of each company’s oil by the consumer.” data-reactid=”28″>Last July, Canadian Natural Resources (CNQ.TO)(CNQ), Canada’s largest oil and gas producer, announced it cut greenhouse-gas emissions by 29 per cent and methane emissions by 78 per cent since 2012. Earlier this month, Cenovus Energy (CVE.TO)(CVE) announced a plan to reduce per-barrel greenhouse gas emissions by 30 per cent by the end of 2030. Those figures do not include emissions from the consumption of each company’s oil by the consumer.
Meanwhile, fear of a warming planet has seen energy investments increasingly lumped into the sin stock category along with firearms and tobacco.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="BlackRock (BLK), the world’s largest asset manager, recently said it would exit investments that “present a high sustainability-related risk.” ” data-reactid=”30″>BlackRock (BLK), the world’s largest asset manager, recently said it would exit investments that “present a high sustainability-related risk.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="“Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself," BlackRock CEO Larry Fink wrote in his annual letter to CEOs. “In the near future — and sooner than most anticipate — there will be a significant reallocation of capital.”” data-reactid=”31″>“Because capital markets pull future risk forward, we will see changes in capital allocation more quickly than we see changes to the climate itself,” BlackRock CEO Larry Fink wrote in his annual letter to CEOs. “In the near future — and sooner than most anticipate — there will be a significant reallocation of capital.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="In an interview with the BBC late last year, outgoing Bank of England governor Mark Carney urged financial institutions to justify their continued investment in fossil fuels. He warned “a substantial proportion of those assets are going to be worthless.” Carney’s next job will be with the United Nations as special envoy on climate change and finance. ” data-reactid=”32″>In an interview with the BBC late last year, outgoing Bank of England governor Mark Carney urged financial institutions to justify their continued investment in fossil fuels. He warned “a substantial proportion of those assets are going to be worthless.” Carney’s next job will be with the United Nations as special envoy on climate change and finance.
Margaret Eve Childe, director of ESG (environmental, social, and governance) Research & Integration at Manulife Investment Management, sees quantifying environmental risk of individual investments becoming easier as more data becomes available.
“At Manulife, we do scenario analysis on the asset management side,” she said during a panel discussion on Wednesday organized by Reuters Breakingviews. “There is a lot of noise out there in the ESG world. It’s challenging for portfolio managers to consider which ESG factors are material.”
For Wall, a more nuanced approach to Canadian energy investment on Bay Street would help ease the strained relations he sees between Ontario and the Western provinces.
“The alienation is real folks. Whether you think there is justification or not, it is real,” he said. “I happen to think there is justification for people to be frustrated.”
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.” data-reactid=”37″>Jeff Lagerquist is a senior reporter at Yahoo Finance Canada. Follow him on Twitter @jefflagerquist.
<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Download the Yahoo Finance app, available for Apple and Android.” data-reactid=”38″>Download the Yahoo Finance app, available for Apple and Android.
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