Investments

An IMF is an expense you pay for investing in a fund. It covers the services of professionals who manage and administer the fund. These services include portfolio management and recordkeeping.

Typically, as a member of a group retirement plan, the IMFs you pay are lower than those available to individual investors. Lower IMFs can mean higher net returns, since less of your investment returns go to fees. Plus, the money you save gets reinvested, which helps grow the value of your investments.

Understand what an IMF covers
An IMF typically covers the costs associated with managing the fund you’re investing in, including research, fund management, and administrative expenses.

Assess the value you’re getting
Consider what you’re getting in return for the IMF. Higher fees might make sense for you if the fund is providing superior returns or additional services that align with your investment goals.

Get advice
If you’re unsure about the IMFs you’re being charged, consult with a financial advisor who can help you understand the fees and their impact on your investments.

What’s an IMF?
An IMF is charged by investment managers for managing your investment fund and covers services such as research, fund management, and administrative expenses.

How is the IMF calculated?
The IMF is usually calculated as a percentage of the money you have in the fund—or assets under management—and is deducted from your investment returns.

How do IMFs affect my investment returns?
IMFs are deducted from your gross returns, which reduces your net returns. Over time, high fees can significantly affect the growth of your investments.

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We use a time-weighted formula that measures performance from the date of your first contribution in the fund to the end of each reporting period, and factors in the investment management fee for the fund. It’s called Modified Dietz with monthly linking.

This approach doesn’t consider the timing or amounts of your deposits, withdrawals, or transfers, so it lets you see how well your funds performed over a period regardless of your investment decisions (for example, if you withdrew during a market downturn). Isolating the fund performance makes it easier to compare the fund against a benchmark or other funds.

Understand the basics
The rate of return is the gain or loss of an investment over a specified period, expressed as a percentage of the investment’s initial cost.

Review fund performance regularly
Regularly reviewing your rate of return helps you understand how your investments are performing and decide if adjustments are needed to meet your financial goals.

Adjust for Inflation
Consider the impact of inflation on your rate of return to get a more accurate view of your investment’s purchasing power over time.

Get advice
If you're not sure about your rate of return calculations, talk to a financial advisor. They can help you account for various factors, such as fees, costs, interest rates, inflation, and taxes.

What’s a good rate of return for my retirement plan?
A “good” rate of return depends on individual goals, risk tolerance, and market conditions. A financial advisor can help you determine what’s right for you.

How does inflation affect my rate of return?
Inflation reduces the purchasing power of your returns. The real rate of return, which adjusts for inflation, provides a more accurate measure of your investment’s growth. Talk to a financial advisor to help you determine your real rate of return.

What should I do if my rate of return is lower than expected?
Consult with a financial advisor to review your investment strategy and make necessary adjustments to align with your financial goals.

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Many factors affect fund manager performance, which is why our monitoring process evaluates a wide range of significant quantitative and qualitative measures. Here's what’s involved in our fund manager review process:

• Monitoring of market events and fund performance on a day-to-day, monthly, and quarterly basis
• Formal annual reviews that include:
  • Absolute performance, risk-adjusted performance, and consistency compared to a peer group and benchmark
  • The fund's investment policies and procedures to ensure objectives, risk tolerances, and constraints are being met
  • An interview with the fund manager to evaluate qualitative factors such as manager turnover and consistency of style

About performance reviews
Fund managers undergo regular reviews to evaluate their investment strategies, risk management, and fund performance against benchmarks.

About compliance with regulations
Fund managers must meet strict regulatory standards set by financial authorities to ensure ethical practices and protect investors' interests.

How often are fund managers reviewed?
Fund managers undergo quarterly and annual reviews to assess their performance and adherence to investment strategies.

What regulations must fund managers comply with?
Fund managers must comply with regulations set by financial authorities such as the Canadian Securities Administrators.

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