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One year, six awards for AGF

The once-struggling fund firm racked up a slew of trophies at a recent event, KEITH DAMSELL writes


A 22-hour flight from Singapore failed to quell Blake Goldring's buoyant mood Friday.

"I am feeling pretty good for the organization. It's a great moment, I have to say," said Mr. Goldring, chairman and chief executive officer of AGF Management Ltd. The wealth management company's long road to recovery was publicly recognized Thursday night at the 2006 Canadian Investment Awards in Toronto. AGF was the night's big winner, making off with six trophies, including the 2006 Advisors' Choice Investment Fund Company Award.

Mr. Goldring was on business in Asia and returned to Toronto at midnight Thursday. He spent much of Friday congratulating the firm's management and employees.

It's a marked difference from a year ago when AGF struggled to end a long sales slump. Operations were restructured and a lot of time and energy spent listening to advisers. The firm's most significant move was the launch of Elements, a fund portfolio that pays rebates to investors if returns fall short of performance benchmarks. The portfolio's assets under management recently passed $1-billion.

In October of this year, AGF ranked fourth over all in mutual fund sales with $152-million, and it led all non-bank firms. Mr. Goldring is optimistic about the coming registered retirement savings plan sales season.

"We've got some strong wind behind our back. . . . The foundation has been built and now it is the time for us to drive forward," he said.

Other multiple award winners included Dynamic Mutual Funds, taking home four awards, including the Person of Influence Award for Kym Anthony, president and chief executive officer of Dynamic's sister company, Dundee Financial Group. Vancouver's Phillips Hager & North Investment Management Ltd. swept the fixed-income category, winning four awards for its bond management skills.

Small, independent money managers had a strong showing, too. Allan Jacobs, the low-profile manager of the Sceptre Equity Growth Fund, won the night's most celebrated prize, the Morningstar Fund Manager of the Year. The small-cap equity fund has posted a stunning annual average return of 18.5 per cent under his 13-year tenure.

Other small firms in the winners circle included Acuity Funds Ltd., Leon Frazer & Associates Inc. and Integra Capital Ltd.

A few special citations:

Speedy Delivery Award: The marathon awards ceremony is widely considered an event to be endured rather than enjoyed, often taking two hours or more to distribute all the hardware. In contrast, this year's roll call of 51 award winners, presentations and speeches clocked in at 90 minutes. Attendees praised organizers for keeping the event moving at a brisk pace.

Ubiquitous TV theme song award: The West Wing. The swelling strings of the U.S. White House drama were played repeatedly as winners made their way to the stage. Actor Martin Sheen was nowhere in sight.

Too much information award: An ebullient David Taylor, manager of the Dynamic Canadian Value Fund, bounded on stage to accept the Canadian Equity Fund of the Year Award. In his remarks, Mr. Taylor thanked his wife for not throwing him out of the house for using his BlackBerry while having sex.

Shut-out award: Despite the plethora of categories, three of Canada's largest fund companies went home empty-handed: TD Asset Management, BMO Funds and Franklin Templeton Investments Corp.

PPNs gain on trust selloff

Principal-protected notes are the surprise beneficiary of the income trust selloff.

BMO Nesbitt Burns Inc., OpenSky Capital and other firms report November sales of the asset class have been brisk and are well ahead of last year's pace.

On Oct. 31, the federal government announced plans to tax income trusts in 2011. The asset class, along with mutual funds tied to trust returns, have sold off sharply in recent weeks. It's widely expected that the carnage may not be over as some investors may opt to sell income-trust-weighted, closed-end funds through the winter months.

"There's been a definite uptick in business," said Steven Marshall, president of alternative investment firm OpenSky. The Montreal firm is marketing a note linked to a balanced growth fund managed by McLean Budden Ltd. and a second note tied to the performance of a mix of eight U.S., foreign and commodity indexes.

"There was a lot of security associated with income trusts," Mr. Marshall said. "Then, all of a sudden, the rules changed. Investors are left unfortunately holding the bag and they are in need of security."

A principal-protected note is typically a basket of securities that, if held to term, guarantees the investor his principal investment plus any additional investment gains. Notes may be tied to a range of asset classes, from an equity index to a basket of securities or mutual funds. Many offer monthly cash distributions.

The asset class is the subject of much debate. Cautious small investors like the PPN's no-lose proposition but some advisers deride high management costs and redemption fees.

© 2007 The Globe and Mail. All rights reserved.

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