CIFSC Completes Quarterly Fund Category Review and Reiterates Position on Income Trusts

The Canadian Investment Funds Standards Committee (CIFSC) announced today that it has completed its first quarterly review of funds under its new classification system.

The review identified 48 funds (out of more than 8000) that in the last three months have shifted their portfolio allocations enough to move into new categories. The managers of these funds have been advised and offered an opportunity to respond. The portfolios of 13 more funds have changed to put them at a category threshold. They are not being moved at this time, but will be monitored for possible future reclassification.

When the new classification system was implemented in August 2006, CIFSC said it would conduct a complete review of all funds and their categories every quarter. This was designed to ensure funds that have been making significant changes in their portfolio allocations would be identified and, if applicable, moved to more appropriate new categories in a timely fashion.

As well, in light of the Canadian government’s proposal this week to change the tax treatment of income trusts, CIFSC reaffirmed its decision to retain a separate income trust category during its 2006 fund category system revisions.

“The announcement serves as an endorsement of our decision to retain this category” said CIFSC Chair Ralf Hensel. “During our review process, we retained our Canadian Income Trust category because of the different risk profile associated with them. At the time there was a great deal of uncertainty as to the government’s position and the market behaviour of income trusts, so we felt it appropriate to keep the category until the market had worked through the issues.”

CIFSC is a volunteer organization, made up of competing, yet collaborative organizations, committed to the goal of a single, objective and standardized investment fund classification system for use across Canada. Its current membership includes representatives from Canadian Life and Health Insurance Association, Cannex Financial Exchanges, FP Datagroup, Fundata Canada, The Globe and Mail, IFIC, Lipper and individual consultants.

For further information, contact:
Ralf Hensel, Chair of CIFSC,
416-363-2150 ext. 254

For comments on the new categories or other matters, the committee can be reached via email at: