TORONTO, February 29, 2016 – RBC Global Asset Management Inc. today announced that it will change the way it calculates the Management Expense Ratios (MERs) for Series F units of RBC Select Portfolios, RBC Managed Payout Solution, and RBC Managed Payout Solution – Enhanced ( “Portfolios”).
Series F units of the Portfolios collectively hold approximately $260 million in client assets. All other series of the Portfolios, including Series A, which collectively hold over $63 billion in assets, will be unaffected by this change.
The management fee of the Portfolios is currently variable and is determined on a basis such that all fees and expenses that comprise the MER, other than the additional cost of HST, will be equal to a specified percentage of the portfolio. The specified percentage includes the management fee, administration fee, taxes (other than the additional cost of HST), other fund costs and any fees and expenses of the underlying funds in which the Portfolios invest.
Effective June 30, 2016, the Series F management fee will be fixed, and the MER of Series F units of the Portfolios will be comprised of the management fee, administration fee (including that of the underlying funds), taxes and other fund costs. By fixing the management fee, investors will be able to more easily compare Series F management fees of the Portfolios to other mutual funds in fee-based accounts.
The Series F management fee will be fixed at a rate that is between 1 basis point lower and 11 basis points higher than current Series F management fee levels. The new Series F management fees of the Portfolios will be 5 to 15 basis points below the industry median management fee in their respective categories. The chart below outlines the changes:
|Portfolio||Series F Management Fees|
|RBC Managed Payout Solution||0.60%||0.60%||-||0.75%|
|RBC Managed Payout Solution - Enhanced||0.65%||0.65%||-||0.75%|
|RBC Select Very Conservative Portfolio||0.59%||0.70%||0.11%||0.75%|
|RBC Select Conservative Portfolio||0.64%||0.75%||0.11%||0.85%|
|RBC Select Balanced Portfolio||0.73%||0.80%||0.07%||0.85%|
|RBC Select Growth Portfolio||0.82%||0.85%||0.03%||0.90%|
|RBC Select Aggressive Growth Portfolio||0.91%||0.90%||(0.01%)||1.00%|
1 As disclosed in the 2015 Interim Management Report of Fund Performance of each Portfolio.
2 Compiled by RBC GAM based on Canadian Investment Funds Standards Committee (CIFSC) categories with data provided by Morningstar Research Inc.
The Independent Review Committee of the Portfolios considered and provided a positive recommendation for the proposed changes after determining that they would achieve a fair and reasonable result for unitholders of Series F units of the Portfolios.
Unitholders will be sent a written notice detailing the changes at least 60 days prior to the effective date. Unitholders will have a right to redeem or re-classify their units up to the close of business on the business day immediately preceding the effective date of the changes. Re-classifications are not considered taxable.
Please read the prospectus before investing. There may be commissions, trailing commissions, management fees and expenses associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated.
About RBC Global Asset Management and RBC Wealth Management
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC) and includes BlueBay Asset Management and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to institutional, high-net-worth and individual investors through separate accounts, pooled funds, mutual funds, hedge funds, exchange-traded funds and specialty investment strategies. The RBC GAM group of companies manage more than $380 billion in assets and have approximately 1,300 employees located across Canada, the United States, Europe and Asia.