Investors Group to reduce management fees on majority of its mutual funds

WINNIPEG - One of Canada's largest mutual fund companies says it will reduce the management fees it charge on many of its products, starting in July.

Investors Group, which is part of IGM Financial (TSX:IGM) and the Power group of companies, says the reductions will affect about two-thirds of the funds it offers.

Canada's mutual fund industry — which manages stocks, bonds and other types of investments for individual investors — has been under pressure to lower management expense ratios, or MERs.

The MERs, usually based on the value of the assets being managed by the funds, represent some of the built-in cost of operating the funds.

Investors Group said Friday it will reduce its management fees by up to 0.4 per cent per year — equivalent to about $4 per $1,000 of assets, although not all reductions will be that large.

The company says it will offset the impact of the lower fees by improved future sales and changes to the way it compensates its the people who sell its funds to investors.

Investors Group has about 4,500 independent representatives, which it calls consultants, throughout Canada.