Evolve launches active preferred and automobile-innovation ETFs

Rudy Luukko 29 September, 2017 | 10:00PM

Evolve Funds Group Inc. has hired value-style manager Foyston, Gordon & Payne Inc. (FGP) as the sub-advisor of Evolve Active Canadian Preferred Share (DIVS), one of two new Evolve-sponsored strategies launched today on the Toronto Stock Exchange.

According to the prospectus, FGP will employ a multi-strategy approach, including security selection, sector allocation and interest-rate anticipation, and will typically invest in 20 to 75 securities. Along with preferred shares, the exchange-traded fund's holdings may also include convertible securities.

Under normal market conditions, FGP will generally not invest more than 30% of the portfolio in securities of non-Canadian issuers. Based in Toronto, FGP manages approximately $13 billion in Canadian equities, foreign equities and Canadian bonds.

The second Evolve investment mandate making its TSX debut is Evolve Automobile Innovation Index (CARS), which is currency-hedged. Also offered are unhedged units that trade under the symbol CARS.B.

CARS seeks to replicate the performance of the Solactive Future Cars Index Canadian Dollar Hedged. The index constituents are shares of companies that are directly or indirectly involved in developing electric drivetrains, autonomous driving or network-connected services for automobiles. The index provider, Solactive AG, is based in Frankfurt, Germany. Solactive operates globally and serves primarily as an index provider for ETFs.

The management fee is 0.65% for the preferred-shares ETF and 0.40% for both the hedged and unhedged units of the specialty auto-industry ETF. For both ETFs, an administration fee of 0.15% covers most expenses.

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Rudy Luukko

Rudy Luukko  Rudy Luukko is a freelance writer who contributes to Morningstar.ca on topics involving fund industry trends and regulatory issues. He retired in May 2018 from his position as editor, investment and personal finance, at Morningstar Canada, where he had worked since 2004. He has also worked as an editor and writer for various general, specialty and institutional media, and he has co-authored courses for the Canadian Securities Institute. Follow Rudy on Twitter: @RudyLuukko.