Subject: PDT
Middlefield Expands ETF Platform
CALGARY, March 18, 2019 /CNW/ - Middlefield Group is pleased to announce the expansion of its ETF platform with the proposed conversion of Middlefield Healthcare & Wellness Dividend Fund ("Wellness Fund") (TSX: HWF.UN) and American Core Sectors Dividend Fund ("Core Fund") (TSX: ACZ.UN), collectively referred to as the "Conversions". In keeping with our objective of providing value-added solutions to investors and financial advisors, these additions to our ETF platform represent unique, actively managed strategies which investors would have difficulty replicating with passive investment products.
The Manager believes the Conversions will benefit unitholders for the following reasons:
- Reduced management fee: Upon completion of the Conversions, Wellness Fund and Core Fund unitholders will see substantial management fee reductions from 1.1% to 0.85% and 0.75%, respectively.
- Larger asset base improves liquidity and lowers costs: Since ETFs are in continuous distribution, there is the potential for ongoing growth opportunities and the further reduction of expenses, as a percentage of assets, through greater scale.
- Efficient trading: With a designated broker acting as a market maker, ETF units trade efficiently with tighter bid/ask spreads and closer to their net asset value.
About Middlefield Healthcare & Wellness Dividend Fund | ||||
The Wellness Fund expands on Middlefield's proven track record of active management in the healthcare sector. Dean Orrico, Middlefield's Chief Investment Officer, is the lead portfolio manager of the Wellness Fund, with Dr. Richard Evans of SSR LLC acting as an industry advisor to the fund. | ||||
Inception Date | 1-Year | Since Inception | ||
Middlefield Healthcare & Wellness Dividend Fund | October 20, 2016 | 14.5% | 11.1% | |
S&P/TSX Composite Total Return Index | 6.9% | 6.3% | ||
MSCI Daily TR World Net Health Care USD Index | 9.0% | 11.3% | ||
Annualized total returns including reinvestment of distributions and net of fees as at February 28, 2019. | ||||
Source: Bloomberg and Middlefield. | ||||
About American Core Sectors Dividend Fund | |||||
The Core Fund provides investors with a diversified, actively managed portfolio comprised of dividend paying securities within core U.S. sectors. Robert Lauzon, Middlefield's Deputy Chief Investment Officer, is the lead portfolio manager of the Core Fund, which has outperformed both the S&P/TSX Composite Index and its benchmark since inception, as shown in the table below. | |||||
Inception Date | 1-Year | 3-Year | 5-Year | Since Inception | |
American Core Sectors Dividend Fund | December 19, 2013 | 6.3% | 12.5% | 10.9% | 11.3% |
S&P/TSX Composite Total Return Index | 6.9% | 11.0% | 5.5% | 6.7% | |
S&P 500 Total Return Index | 4.7% | 15.0% | 10.7% | 10.9% | |
Annualized total returns including reinvestment of distributions and net of fees as at February 28, 2019. | |||||
Source: Bloomberg and Middlefield. | |||||
Special meetings of both funds will be held on May 17, 2019, at which unitholders of record for each fund as of April 11, 2019 will be asked to approve the conversion of the applicable fund into an ETF. Further details of the meetings and the proposals of Middlefield Limited, manager of the Funds (the "Manager"), will be provided in a joint information circular to unitholders.
If approved, the Manager anticipates implementing the Conversions by late May 2019. All costs of the Conversions, including the cost of the meetings, will be borne by the Manager. Following the Conversions, the funds will continue to be actively managed by Middlefield's experienced portfolio management team. Both funds will continue to trade on the TSX under their current respective ticker symbol until Conversion. The Conversions to ETFs will not be taxable events for unitholders of the funds.
About Middlefield Group
Middlefield was established in 1979 and has approximately $4 billion in assets under management. Middlefield is a Specialty Investment Manager which creates investment products designed to balance risk and return to meet the demanding requirements of Financial Advisors and their clients. These financial products include Mutual Funds, ETFs, Private and Public Resource Funds, Venture Capital Assets, TSX Publicly Traded Funds and Real Estate Investment Funds and Partnerships.
Commissions, trailing commissions, management fees and expenses all may be associated with ETF investments. Please read the prospectus before investing. The indicated rates of return are the historical annual compounded total returns including changes in unit value and reinvestment of all distributions and do not take into account sales, redemption, distribution or optional charges or income taxes payable by any securityholder that would have reduced returns. ETFs are not guaranteed, their values change frequently and past performance may not be repeated.
Certain statements in this press release may be viewed as forward-looking statements. Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, intentions, projections, objectives, assumptions or future events or performance (often, but not always, using words or phrases such as "expects", "is expected", "anticipates", "plans", "estimates" or "intends" (or negative or grammatical variations thereof), or stating that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved) are not statements of historical fact and may be forward-looking statements. Statements which may constitute forward-looking statements relate to: the proposed timing of the conversions and completion thereof; the benefits of the conversions; and the funds that are proposed to be converted. Forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements including as a result of changes in the general economic and political environment, changes in applicable legislation, and the performance of each fund. There are no assurances the funds can fulfill such forward-looking statements and the funds do not undertake any obligation to update such statements. Such forward-looking statements are only predictions; actual events or results may differ materially as a result of risks facing one or more of the funds, many of which are beyond the control of the funds.
SOURCE American Core Sectors Dividend Fund
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