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AIM Trimark merges funds

Changes made to reorganize low performers, eliminate overlap in product line

INVESTMENT REPORTER

TORONTO -- Several smaller, underperforming funds at AIM Trimark Investments disappeared, so to speak, yesterday.

At an annual meeting, unit holders approved a resolution that AIM Global Aggressive Growth Class, AIM Global Energy Class, AIM Dent Demographic Trends Class and AIM Global Sector Managers Class be rolled into the larger fund, AIM Global Theme Class.

Since it made its debut three years ago, AIM Dent Demographic Trends Class, which carried a hefty management fee of 3.06 per cent, has lost 27.4 per cent. Others, including AIM Global Telecommunications Class, haven't fared better, losing 44.7 per cent in the past three years.

Shareholders also gave the go-ahead to allow AIM Global Technology Class to absorb AIM Global Telecommunications Class and for Trimark Canadian Endeavour Fund to absorb AIM Canadian Leaders Fund.

But AIM Trimark vice-president Dwayne Dreger said the changes were taking place to tidy up the product line as some funds overlapped with others due to the merger of AIM Funds Management Inc. and Trimark Financial Corp. three years ago. Other funds were merged yesterday because they were smaller funds with large fees and narrow mandates, he said.

"The end result in aggregate is a cheaper lineup to figure out," he said.

Despite three difficult years for the investment industry, AIM Trimark officials said yesterday that the fund company, which has $35-billion in assets under management, has performed well.

Chief financial officer Arthur Labatt told shareholders yesterday that the past three years have been the most difficult that most in the investment industry have seen.

Equity markets have been dismal and corporate scandals have dominated newspaper headlines, he said. Many investors have lost faith in the public markets, but company employees have worked as a team, and "relative to others, we've done very well," he said.

Eighty-seven per cent of AIM Trimark's assets are in the top two quartiles, he said. That means most of the money managed for investors by AIM Trimark is performing above the median for similar funds in the same category.

Patrick Farmer, AIM Trimark's chief investment officer, said: "Our company has $29-billion of investors' money invested in equity funds that have been around long enough to have a track record. Seventy-nine per cent of those assets have produced a positive return for investors over the past three years."

That's a stark contrast to many industry indices, such as the Nasdaq and S&P, which have fallen 25.7 per cent and 11 per cent, respectively, over the same period, he said.

With the indices now up from the beginning of the year, "investors have jumped aboard the recovery train," he said.

He believes that the equity market may give a return of 7 to 10 per cent over the next three to five years. Typically, equities tend to do 5 to 7 per cent better than inflation.

One unit shareholder asked whether management expense ratios, which cover everything from the salaries paid to manage the fund to legal fees to taxes, will be reduced. AIM Trimark chairman Robert Luba said there are no guarantees but, "We're clearly on top of that situation." Mr. Labatt said the MERs for AIM Trimark's family of funds are low over all in the industry and that fees for the bigger funds "should come down."

© 2007 The Globe and Mail. All rights reserved.

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