Industrial Alliance to Close Eleven Seg Funds

By Andrew Rickard | September 09 2014 01:25PM

On November 7, Industrial Alliance will close eleven of its segregated funds and remove others from its Ecoflextra series.

In a communication sent to its sales force earlier this month, Industrial Alliance explained that it had decided to close the funds in order to simplify its offering. The funds to be closed and their replacements are:

Original FundReplacement Fund
Fidelity Canadian Asset AllocationDiversified Opportunity
Monthly Income (PH&N)Diversified Income
Fidelity DividendDividend Growth
Fidelity Dividend HybridDividend Growth Hybrid
Canadian Equity (Jarislowsky)Canadian Equity Value
Canadian LeadersDividend Growth
Canadian Leaders HybridDividend Growth Hybrid
Global Equity (Mackenzie Cundill)Global Equity
Global Equity (Mackenzie Cundill) HybridGlobal Equity Hybrid
Global Equity Small Cap (Deutsche AWM)Global Equity
International Equity (MFS)International Equity

In an effort to manage the risk associated with lifetime income guarantees, the insurer is also removing the following funds from the IAG SRP Ecoflextra Series and/or from the Ecoflextra Guaranteed Surrender Series:

Original FundReplacement Fund
Fidelity Canadian OpportunitiesCanadian Equity Growth
Fidelity Canadian Opportunities HybridCanadian Equity Growth Hybrid
Tactical Income (Aston Hill)Diversified Income
Global Dividend (Dynamic)Global Equity
Global Dividend (Dynamic) HybridGlobal Equity Hybrid

Industrial Alliance says that the majority of these changes will result in reduced management fees for clients. Only the following four funds will be affected by fundamental changes and trigger the right to free exit; the first three because of an increase in management fees, and the last due fundamental changes to investment objectives:

Original FundReplacement Fund
Canadian LeadersDividend Growth
Canadian Leaders HybridDividend Growth Hybrid
International Equity (MFS)International Equity
Global Equity Small Cap. (Deutsche AWM)Global Equity

The insurer says that clients will receive letters this week to inform them of the upcoming changes and the options available.