CI Investments Inc. has launched three monthly-pay mutual funds that will be managed by Marret Asset Management Inc., expanding the role of CI's new affiliate.
Announced on March 3, they are Marret Strategic Yield, an income-oriented asset-allocation fund, and the high-yield funds Marret High Yield Bond and Marret Short Duration High Yield. The lead manager of all three funds is Barry Allan, Marret's president and CEO.
Marret Strategic Yield will invest globally in a diversified portfolio of fixed-income and equity securities. The fund's equity, fixed income and cash components will be actively managed. The geographic exposure will vary, since there are no restrictions on how much the fund invests in any country or region.
The equity holdings may include common shares, preferred shares and convertible preferred shares, royalty trusts, real estate investment trusts (REITs) and other income-producing securities. The fixed-income holdings will include high-yield debt as well as investment-grade securities and convertible issues.
Co-managed by Marret's Margot Naudie, Marret Strategic Yield will employ a combination of macroeconomic analysis and securities selection. In making their picks, the managers will assess the ability of companies to generate cash and meet their debt-repayment obligations.
According to the prospectus, Marret's research and analysis will focus on industry position, operating leverage, management strength and experience, historical earnings and future projections, liquidity profile and accounting ratios and practices.
All three funds may employ derivatives-based strategies to hedge their security positions and currency exposure. They may also engage in short selling and securities lending.
Marret High Yield Bond will invest primarily in North American corporate bonds that are rated BBB (the lowest level of investment grade) or below. Co-managed by Marret's Adrian Prenc, the fund's investments will also include convertible debt, bank loans and other income-generating securities. To help mitigate risk, the fund will be well diversified across industries.
Marret Short Duration High Yield, also co-managed by Prenc, will invest primarily in an industry-diversified portfolio of higher-yielding corporate bonds with maturities under five years or callable in less than three years. The holdings will be mostly lower-quality credits, with ratings of BBB or lower. The fund may also hold floating-rate loans and other short-maturity convertible or preferred securities.
For all three new funds, the minimum initial investment is $500 for the optional-load Class A (available under front-end-load, deferred-sales-charge and low-load purchase options) and for the Class F units designed for fee-based accounts. Management fees for Class A of the three funds range from 1.50% to 1.90%, plus an administration fee of 0.20% that covers most fund expenses other than regulatory-related costs. (See table.)
| CI's Marret suite of funds | |||||
| Fund | Mgmt fee (Class A) |
Mgmt fee (Class F) |
Admin. fee (Class A and F) |
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| Marret Strategic Yield | 1.90 | 0.90 | 0.20 | ||
| Marret High Yield Bond | 1.70 | 0.85 | 0.20 | ||
| Marret Short Duration High Yield | 1.50 | 0.85 | 0.20 | ||
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| Source: CI Investments Inc. | |||||
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CI Financial Corp. CIX, the parent company of CI Investments, acquired 65% of Marret in November, with an option to acquire the remaining 35% in the next three years.
This week's expanded role for Marret follows its appointment in December to manage portions of four CI funds: CI Harbour Growth & Income 
, CI Harbour Growth & Income Corporate Class , CI Harbour Global Growth & Income Corporate Class and CI Select Income Managed Corporate Class.
