CSA takes big step towards ban on embedded commissions + MORE Jun 30th

CSA has released a notice indicating that securities regulators are on course to ban embedded commissions.
“After thorough examination, the CSA finds that the prevailing practice of remunerating dealers and their representatives for mutual fund sales through commissions, including sales and trailing commissions, paid by investment fund managers (embedded commissions) raises a number of investor protection and market efficiency issues that suggest a need to consider change,” says the notice.
Why you should learn to love sell-offs »
A key argument against banning commissions is that CSA should wait until major regulatory reforms, such as CRM2, have had time to reshape the advisor-client relationship. The cumulative impact of these reforms, the argument goes, could make a commission ban at best unnecessary, at worst confusing and disruptive.
CSA’s notice appears to reject this argument. After referencing CRM2, Point of Sale and the recent batch of proposals focused on the best interest standard, the notice states that while these initiatives “may help address some” of the investor protection and market efficiency issues raised by embedded commissions, they’re probably not enough…

News that the U.K. voted to leave the European Union crashed into the markets last week. Fear, uncertainty and doubt ruled the roost and stocks took a dive—at least for a few days.
But the world generates a copious amount of bad news and little of it should be acted on by investors. After all, the market was very glum in January and then jumped to new highs just a few weeks go. It’s part of an all too familiar pattern of panic followed by exuberance.
Rather than adopting emotional cues from the market, wise investors cast a skeptical eye toward the big news stories of the day because acting on them often leads to disappointment.
Instead, it is better to focus on your investment plan and process. After all, it is smart to develop a plan that can handle the market’s inevitable ups and downs.
For instance, couch potato investors keep an eye on their asset allocation, investment fees, taxes, and the ability of their funds to deliver what they promised. Market fluctuations are a sideshow that can be ignored because index investors know that a diversified low-cost portfolio will likely fare well over the long term…

NEW YORK, N.Y. – Hershey on Thursday rejected a takeover offer from Oreo maker Mondelez that would bring some of the world’s best known cookies and chocolates under one company.
It confirmed receiving a preliminary offer from Mondelez for a mix of cash and stock totalling $107 for each share of Hershey Co. common stock. That would value the deal at roughly $22.3 billion, according to FactSet.
Hershey said that, following a review, its board determined the offer provided “no basis for further discussion.” A deal would be subject to approval by the Hershey Trust, a controlling shareholder.
A spokeswoman for Mondelez, Valerie Moens, declined to comment on whether the company would make a new offer.
The Wall Street Journal, citing sources it did not name, had reported earlier in the day that Mondelez told Hershey it would take the chocolate maker’s name and move its global headquarters to Hershey, Pennsylvania. Hershey’s shares surged following the report, and closed up nearly 17 per cent at $113…

Chinese buyers are now the largest foreign investors in Canadian commercial real estate, having spent $1.3 billion in the first half of this year, according to global real estate firm CBRE Ltd.

Investors tend to rely too heavily on fixed income to pad returns. While it’s true we’ve been spoiled for 30 years—falling yields have pushed bond prices higher—fixed income is meant to balance out a portfolio’s ups and downs and provide some regular yield. It’s not meant to give assets an equities-like capital gains boost. “We have to get back to the point of view that it’s a shock absorber to equity markets,” says Philip Petursson, managing director at Manulife Investments.
It’s only a matter of time until yields rise and bond prices fall, Petursson says. The great rate hike hasn’t happened yet—and countries are still cutting, but things will turn around eventually. With that in mind, some are calling for a dramatic reduction of fixed income in portfolios. Petursson disagrees. Firstly, bonds lose less money than equities—2013 was the last year Canadian fixed income was in the red, and it only fell by 1.13%. Secondly, the top three performing asset classes in 2008 were bond related…