The Securities Commission granted an exemption to a global fixed income exchange-traded fund (ETF) managed by Mackenzie Financial Corporation, allowing it to invest beyond the standard 10% net asset concentration limit in debt securities issued or guaranteed by foreign supranational agencies or governments. This exemption is subject to certain conditions and is based on the ETF’s objective to provide income and capital preservation by investing in sustainable and responsible fixed-income securities worldwide.
The ETF is permitted to invest up to 20% of its net assets in AA-rated foreign government securities and up to 35% in AAA-rated ones. These investments must align with the ETF’s fundamental investment objectives and focus on issuers that adhere to Environmental, Social, and Governance (ESG) criteria.
The exemption is contingent on the securities being traded on mature and liquid markets and the ETF’s prospectus disclosing the associated risks of concentration and the terms of the exemption. The decision is grounded in the provisions of National Instrument 81-102 Investment Funds, specifically sections 2.1 and 19.1, and is consistent with the ETF’s investment strategy. The ETF’s prospectus was filed in all Canadian provinces and territories, and the ETF will be a reporting issuer across Canada.