Investors to be provided mutual fund details earlier

Mutual fund investors will soon be receiving mutual fund details prior to signing on the dotted line.

Beginning May 30, financial advisers and their investment firms will be required to provide investors with a document called “Fund Facts” before the purchase of a mutual fund.

The purchase will not be effective until the document is received by the clients electronically, in-person or by mail. (Investment firms will be responsible for keeping a record of delivery of the document.) read more

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Some hedge funds eye the next Big Short

A group of hedge funds, convinced they have found the next Big Short, are looking to bet against bonds backed by subprime auto loans. Good luck finding a bank willing to do the trade.

Money managers have looked at betting that subprime auto securities will tank for many of the same reasons that investors wagered against risky mortgage bonds in the run-up to the financial crisis: Loan volume has mushroomed in the last few years, lending terms have become looser and delinquencies are ticking higher. Mary Kane, an asset-backed securities analyst at Citigroup Inc., wrote in a note late last month that the bank has received “an explosion of calls” in recent weeks, after the movie The Big Short portrayed a group of traders that wagered against subprime bonds. read more

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Meet the energy hedge funds that made money while oil plunged

The plunge in oil prices has dragged down much of the energy sector with it. Yet, some energy-focused hedge funds managed to avoid the carnage entirely.

Lansdowne Partners – one of Europe’s largest hedge funds with $22-billion (U.S.) – gained 14.8 per cent last year in its long- short energy-focused equity fund, according to a person familiar with the matter. Some commodity trading advisers, or CTAs, posted gains of more than 25 per cent in 2015. read more

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Regulator pushes Canada toward a clearer definition of ‘financial planner’

Canada’s mutual fund regulator is forging ahead with plans to regulate the use of the title “financial planner” in hopes of clarifying for investors whether advisers are up to snuff.

At the national level, there is currently no regulatory body that exercises oversight of financial planning titles, according to a Mutual Fund Dealers Association bulletin. Last fall, the MFDA published a consultation paper on whether there should be regulatory standards for advisers looking to use the title financial planner. After a mandatory comment period, which ended on Dec. 4, the regulator is now looking at ways to standardize the use of the title among mutual fund representatives. read more

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Mutual fund sales decline in December

Overall mutual fund net sales saw a decline last month with sales ending at $1.3-billion, down from $3.8-billion in November 2015.

In December, equity funds saw more redemptions than sales with $38-million in outflows, compared to $9-million in net sales for November. Domestic equity funds continued their net redemption trend, while global and international equity had positive net sales flows, contributing to majority of the net sales, according to a Canaccord Genuity report released today. read more

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Fund regulator weighs further transparency on investing costs

Canada’s mutual fund regulator is looking into whether fees charged by fund companies – such as management fees – should be included in regulatory changes that will provide investors with greater transparency concerning the cost of financial advice and of their investments.

The changes, known as the second phase of the client relationship model (CRM2), are slated for July 16, 2016, and currently do not include the costs imposed by mutual fund managers. read more

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Hedge funds betting against China eye ‘Soros moment’

A handful of mainly U.S.-based macro hedge funds have led bets against China’s yuan since late last year and the coming weeks should tell how right they are in predicting a devaluation of between 20 and 50 per cent.

Since at least last September, Texas-based Corriente Partners, which made hundreds of millions of dollars foreseeing Europe’s debt crisis, has been accumulating tailored “low delta” options – essentially bets with long odds – that provide for an up to 50-per-cent fall in the yuan. read more

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