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PowerShares may head north

Newly renamed Invesco Trimark testing exchange-traded funds in Canadian waters


The folks who sell Trimark mutual funds could wind up hustling PowerShares exchange-traded funds to Canadian investors in the future.

AIM Funds Management Inc. yesterday changed its name to Invesco Trimark Ltd. as part of a rebranding strategy that will culminate in importing offerings from sister firms within global fund giant Invesco Ltd. of Atlanta.

"Because we talk about bringing the best of Invesco to our clients, we will look at things like launching PowerShares and look at all of our investment capabilities around the globe," said Peter Intraligi, president of Invesco Trimark.

Mr. Intraligi would not confirm that PowerShares ETFs could be listed on the Toronto Stock Exchange as early as this fall, saying he is not permitted to talk about offerings until a prospectus has been filed.

Still, Invesco Trimark has already been testing the Canadian waters by offering the PowerShares ETFs as part of Invesco Trimark retirement packaged payout portfolios launched in June. "You can expect that kind of innovation going forward," he said.

New offerings would help turn around an asset decline at Toronto-based Invesco Trimark that has been suffering from about $6-billion in net redemptions over the past year because of the poor performance of its value-oriented Trimark funds and departures of key fund managers.

With the market pullback, the funds have been faring better because they don't own the battered commodity stocks and are not being hit as hard by currency conversion as the Canadian dollar has weakened more recently.

The introduction of ETFs, meanwhile, does not mean moving from being active managers to passive managers, but using them to complement an existing lineup, he added.

"We don't have a heavy commodity weighting in our funds so it would make sense to launch ETFs that were tied to specific energy sectors or commodities," he suggested.

Canadian investors can already get access to U.S.-listed PowerShares ETFs, which invest in everything from clean energy to water companies, but it means buying in U.S. dollars.

The name change to Invesco Trimark is the culmination of the restructuring under Invesco's chief executive officer, Martin Flanagan, who has focused on integrating different parts of the company acquired through acquisitions, Mr. Intraligi added.

Invesco, formerly Amvescap PLC, based in London, was a global asset manager with independently run businesses following an acquisition spree that included buying Toronto-based Trimark Financial Corp.

"We now operate as a single investment management firm with distinct investment centres around the globe," Mr. Intraligi said, noting that the Trimark investment team is one of the centres.

Under Mr. Flanagan, Invesco also bought WL Ross & Co. LLC, a storied private equity shop, and PowerShares Capital Management LLC, the third-largest ETF provider in the United States, in 2006.

Fund analyst Dan Hallett expects that Invesco Trimark will target the marketing of PowerShares ETFs to fee-only financial advisers if they come to Canada.

"The PowerShares tend to be niche-type products," and will probably go to head to head with ETF provider Claymore Investments Inc. as opposed to Barclays Global Investors, whose funds mainly mimic indexes, he said.

© 2007 The Globe and Mail. All rights reserved.

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