Among the first of their kind to hit the Canadian market, the LongPoint funds have been a year in the making. They give investors in Canada domestic access to triple-leveraged ETFs rather than having to seek them out south of the border, said Steve Hawkins, CEO and founder of Toronto-based LongPoint.
“It’s very disappointing to see active Canadian investors trading U.S. ETFs when a Canadian ETF equivalent doesn’t exist,” Hawkins said in an interview Friday.
The new funds, which each have a management fee of 1.55% and do not hedge their currency exposure to the U.S. dollar, include:
- MegaLong (3X) NASDAQ-100 Daily Leveraged Alternative ETF (TSX: QQQU), which seeks to replicate three times the daily performance of the Nasdaq-100.
- MegaLong (3X) S&P 500 Daily Leveraged Alternative ETF (TSX: SPYU), which seeks to replicate three times the daily performance of the S&P 500.
- MegaLong (3X) US Semiconductors Daily Leveraged Alternative ETF (TSX: SOXU), which seeks to replicate three times the daily performance of the Solactive United States Semiconductor 30 Capped Index.
- MegaShort (-3X) NASDAQ-100 Daily Leveraged Alternative ETF (TSX: QQQD), which seeks to replicate three times inverse of the daily performance of the Nasdaq-100.
- MegaShort (-3X) S&P 500 Daily Leveraged Alternative ETF (TSX: SPYD), which seeks to replicate three times inverse of the daily performance of the S&P 500.
- MegaShort (-3X) US Semiconductors Daily Leveraged Alternative ETF (TSX: SOXD), which seeks to replicate three times inverse of the daily performance of the Solactive United States Semiconductor 30 Capped Index.
Five more triple leveraged ETFs from LongPoint are expected to be listed on the TSX on May 29. They include:
- MegaLong (3X) 20+ Year US Treasury Daily Leveraged Alternative ETF (TSX: TLTU)
- MegaLong (3X) Canadian Banks Daily Leveraged Alternative ETF (TSX: BNKU)
- MegaLong (3X) Canadian Gold Miners Daily Leveraged Alternative ETF (TSX: CGMU)
- MegaShort (-3X) 20+ Year US Treasury Daily Leveraged Alternative ETF (TSX: TLTD)
- MegaShort (-3X) Canadian Gold Miners Daily Leveraged Alternative ETF (TSX: CGMD)
The leveraged funds allow investors to make bets based on short-term market signals, momentum shifts and geopolitical developments.
While leverage is used to amplify returns, it can also amplify losses. Hawkins cautioned that leveraged ETFs are more suitable for experienced traders with a high risk tolerance and that they need to be monitored and managed on a regular basis.
“They are for the active trader, they are not for the faint of heart,” he said. “They’re really for sophisticated, knowledgeable traders who understand what’s going on in the marketplace and have a high conviction, short-term trading view of what they think is going to happen.”
Hawkins also suggested these products should not make up the core of an investment portfolio, but rather “a very small portion of your portfolio where you want to take a more active role with respect to trading in and out of things.”
He noted that the leverage applied to the products resets daily, “so every day it’s a compound either up or down, depending on the return of the underlying ETF.”
Manulife launches four new ETF series
Manulife Investment Management says it has created four new ETF series of existing mutual funds.
Launched Wednesday, the new ETF series include:
- Manulife Core Plus Bond Fund – ETF Series (TSX: MCOR), which provides investors with exposure to a mix of investment-grade and high-yield government and corporate bonds. The fund is actively managed. Its annual management fee is 0.45% of the series’ value and the annual fixed administration fee is 0.15% of the series’ value.
- Manulife Fundamental Equity Fund – ETF Series (TSX: MFUN), which provides investors with access to Canadian, U.S. and global equities. It’s focused on companies that exhibit “sustainable business models, predictable cash flows and growing dividends,” the release said. Its annual management fee is 0.71% of the series’ value and the annual fixed administration fee is 0.22% of the series’ value.
- Manulife Canadian Equity Class – ETF Series (TSX: MCAN), which provides investors with exposure to Canadian equities. This fund is also focused on companies that exhibit “sustainable business models, predictable cash flows and growing dividends,” the release noted. The annual management fee is 0.68% of the series’ value and the annual fixed administration fee is 0.22% of the series’ value.
- Manulife Dividend Income Fund – ETF Series (TSX: MDIF), which provides investors with exposure to Canadian, U.S. and global dividend-paying businesses. It seeks to provide access to fixed monthly income and potential growth. The annual management fee is 0.83% of the series’ value and the annual fixed administration fee is 0.22% of the series’ value.
CIBC launches CLO-based mutual funds
CIBC Asset Management introduced two new actively managed mutual funds that invest in collaterized loan obligations (CLOs) on Wednesday.
The CIBC Income Advantage Fund and CIBC U.S. Dollar Income Advantage Fund aim to provide “enhanced yield potential, meaningful diversification and a floating rate structure designed to navigate fluctuating interest rates,” a release said.
Series A of both funds have an annual management fee of 0.55% and a fixed administration fee of 0.05%, while series F of the funds has an annual management fee of 0.3% and a fixed administration fee of 0.05%. Because these series are new, their fund costs and trading costs are not yet available.
An ETF series is also available for the CIBC Income Advantage Fund (Cboe: CCLO). It has a 0.3% management fee.
Mackenzie Investments launches two new mutual funds
Mackenzie Investments launched two new mutual funds on Wednesday, providing investors with exposure to a variety of markets, sectors and companies.
The new Mackenzie International All Cap Equity Fund seeks to provide investors with international equity exposure, investing in a range of market caps and styles. The fund is managed by Mackenzie’s teams in Europe and Asia, which aim to “pivot and seek out alpha opportunities as they arise,” a release said.
The new Mackenzie US Value Fund invests in undervalued U.S. companies across diverse sectors that exhibit “robust cash flows, resilient business models and substantial growth potential,” the release noted. The fund is sub-advised by Boston, Mass.-headquartered Putnam Investments.
Both funds have a 0.8% management fee.
RQI expands access to its flagship fund
Australia-based global quantitative manager RQI Investors has launched a new fund to give investors in Canada, Europe, the U.K. and Singapore access to its flagship global value strategy.
RQI’s new Global Value Fund is part of its Global Value Strategy, which launched in 2008 and collectively manages more than US$6.5 billion. The strategy is globally managed by Joanna Nash, Ron Guido, Wang Chun Wei and David Walsh, who each have more than 15 years of experience in financial services, a release said.
The new fund is seeded with US$20 million from a family office and a US$30 million co-investment from RQI’s parent company, First Sentier Investors. It’s the first RQI vehicle to be offered outside of Australia.
In the release, Walsh, head of investments with RQI, said the firm is “very pleased to be bringing the RQI Investors Global Value Strategy to new investors; the UCITS fund is well-placed to take advantage of the current market dynamics, where U.S.-led concentration looms large.”
New stablecoin from Transactix
Transactix Financial Inc. says it has introduced a new type of digital currency that’s linked to the value of the Canadian dollar.
In a release, the firm said its newly launched stablecoin is “engineered to bring the speed and versatility of blockchain technology to payments.”
Dubbed CADX, the new stablecoin is backed by $50 million in Canadian assets and is accessible using Transactix’s Stablecoin-as-a-service platform. The firm said the platform has supported more than US$100 billion in global digital transactions to date.
CI expands mutual fund suite
CI Global Asset Management (CI GAM) announced on Wednesday the launch of a mutual fund series of three of its existing ETFs.
The new products, now available in ETF series as well as series A, F, I and P, include:
- CI Global Artificial Intelligence Fund, which invests primarily in global equity securities of companies that are actively involved in the research, development and application of AI technologies.
- CI Global Minimum Downside Volatility Index Fund, which seeks to replicate the performance of a portfolio of companies located in developed markets with “a lower downside volatility than the broader developed equity markets,” net of expenses.
- CI U.S. Enhanced Value Index Fund, which seeks to track the performance of a portfolio of large- and mid-cap U.S. equity securities that exhibit “high value characteristics,” net of expenses.
In a release, Jennifer Sinopoli, executive vice-president and head of distribution with CI GAM, said the firm now manages 44 mandates in both ETF and mutual fund series.
She also noted that the new funds are designed to meet specific investor needs in today’s investment environment, providing “actively managed exposure to the AI megatrend” through the CI Global Artificial Intelligence Fund, and equity exposure for those concerned about economic uncertainty and potential market volatility through the CI Global Minimum Downside Volatility Index Fund and CI U.S. Enhanced Value Index Fund.
Russell Investments proposed fund mergers
Russell Investments Canada Ltd. has proposed the merger of several funds:
- Russell Investments Canadian Dividend Class would merge into Russell Investments Canadian Dividend Pool.
- Russell Investments Emerging Markets Equity Class would merge into Russell Investments Emerging Markets Equity Pool.
- Russell Investments Fixed Income Plus Class would merge into Russell Investments Fixed Income Plus Pool.
- Russell Investments Global Smaller Companies Class would merge into Russell Investments Global Smaller Companies Pool.
In a release, the firm said each merger would be implemented by redeeming the shares of the initial fund that’s being terminated in return for a proportionate number of units of an equivalent series of its continuing fund.
Investors of each terminating fund will be asked to approve its merger at special meetings held on or about Aug. 1. If approved, mergers would take effect on or shortly after Aug. 8.
