13 February, 2018 07:00
Alain Huard | Photo : Réjean Meloche
That the commissions incorporated are abolished or not, Invesco Canada is prepared for any eventuality. It has launched in 2016 a strategy that new funds at low cost : the Platform traded funds (PTF).
«Sales of our PTF are increasing. We have exceeded the$ 300 Million of assets under management, which is still very good for a new product. Of securities firms offer to all their clients, PEAK financial Group. On the other are currently testing the approach, » says Alain Huard, vice-president and regional sales director of Invesco Canada.
All of the mutual funds of Invesco are available in format PTF, adds Mr. Huard. «It’s like a different series. The common fund PTF is bought as an ETF, but not in floor stock. It is bought to the neo-bourse Aequitas, to which Invesco has recently assigned its rights on the patent of the PTF. The neo-stock exchange, the shares of TFP do not fluctuate in the day. You can buy the fund PTF as an action. The value is fixed in the end of the day. The distributions are made in the customer’s account the next day. «
The fund traded on such a platform will cost on average 30 % less expensive than a mutual fund traditional. The main reason, the fund is held directly by the broker rather than the fund company.
«There is more in the middle : the information about the transaction no longer has to go through the system Fundserv. It also help to cut costs, it is that there is more of a statement, more of tax information slips (T5) or administrative costs of maintenance of fund. It is the broker who does it, » says Mr. Huard.
The brokers were already of the way with the ETF. They have pointed to Invesco that the TFPS are easy to trade and to follow to the point that they save a lot of time.
For their part, the advisers who have access to the PTF are not fund normal, supports Mr. Huard. «It is so much easier with the TFP. Especially for those who are in discretionary management and asset allocation in the portfolio of their client. All transactions are done in five minutes instead of several days, » he says.
Less expensive than the F-series
Alain Huard takes the example of one of its managed funds, the costs of which amounted to 1.80% for series F. » It becomes even cheaper for our fund traded on platform. For the price, it’s worth it to go in active management. For example, our fund global dividend cost 1,33 % in series F, compared to 0.9 % in series PTF. The Funds for the canadian F-series will cost 1,28 %, compared to 0.75 % in series PTF. The fund PTF are specially designed for the management fees. «
Invesco has also launched two new ETFS from brand Powershares, bond staggered 1-10 years, and REITS (trusts of income from immovable property). «There is a big demand of fixed income, given that interest rates are low, says Mr. Huard. Our funds in the most sold in the last six months is global bond fund, a mutual fund traditional covered at 100 % in foreign currency. This fund is as stable as a canadian bond fund. We launched this fund because there is very little correlated to the market. «
The mutual fund will demonstrate their value, abolition or not
The vice-president of Invesco Canada also believes that the mutual fund would have no difficulty to demonstrate their value, commissions or not. He explains that Invesco insists that its mutual fund assets are actually managed actively, which means that the active part should be at any time of 85 % to 90 % of its assets.
«The manager earns its value by the effort he puts in trying to distinguish themselves from the benchmark index to its market. In the future, the companies of the mutual funds that will be too close to the index will have problems. Investors will understand that an index fund, an index fund beta intelligent and a fund for true active management to control each of the different fees, » says Mr. Huard.
The company dedicated to the independent distribution network are also estimated to have made the hit with his training on the language to adopt to speak of the expenses of the mutual funds to customers. «It has been very requested. The advisors have widely adopted our approach of disclosure based on the value of, and engaged in dialogue on costs with their clients, » he revealed.
Alain Huard believes that the adviser should be able to justify its value ; to be able to say what it does for its customers : whether it be distribution, taxation or estate planning and retirement. These services justify the cost, according to him. «The disclosure has not been the drama expected. The majority of advisors tell us that they had almost no calls. The real test will come, however, when the markets are down.»