National Bank Investments announces measures to optimize its fund lineup

MONTREAL , March 1, 2021 /CNW Telbec/ - National Bank Investments Inc. (NBI) announced today changes to select NBI Funds. These changes include fund mergers, the method of charging operating expenses to select NBI Funds to increase fee predictability and transparency as well as other changes. Certain changes, as outlined below, are subject to regulatory and/or securityholder approval. Where applicable, securityholder approval will be sought at virtual special meetings (individually, a "Meeting" and collectively, the "Meetings") of securityholders of each applicable NBI Fund, to be held concurrently on or about May 17, 2021 .

The proposed changes aim to simplify NBI's product lineup, while also delivering benefits for both investors and advisors offering NBI Funds.

"NBI is committed to maintaining a client-centric approach while also providing investors with our best solutions across a variety of different portfolio managers," said Annamaria Testani , Senior Vice-President, National Sales at National Bank Investments. "The proposed fund mergers will allow advisors to better respond to the needs of their clientele by selecting solutions from a more streamlined product offering."

"These suggested changes will enhance NBI's product offering by providing our advisors with an optimized fund lineup," explained Éric- Olivier Savoie , President and Chief Executive Officer at National Bank Investments. "Offering a simplified list of innovative solutions will reinforce our position as the leading open architecture organization in the industry."

Proposed fund mergers

Subject to obtaining all necessary approvals, NBI proposes to merge each NBI Fund (individually, a "Terminating Fund" and collectively, the "Terminating Funds") into the corresponding NBI Fund (individually, a "Continuing Fund" and collectively, the "Continuing Funds") as indicated in the tables below. Securityholders of record on or about April 1, 2021 will receive Meeting materials in mid-April. If approved, the mergers will be effective on the dates indicated below. Certain mergers, as noted in the tables below, do not require securityholder or regulatory approval. Instead, these investors will be provided 60 days' prior written notice before the mergers are implemented (the "Pre-Approved Mergers"). The Pre-Approved Mergers will be completed on a tax deferred basis.

Fund mergers on or about May 21, 2021

Fund mergers on or about May 28, 2021

Fund mergers on or about June 4, 2021

The Terminating Funds listed above will be closed to new subscriptions as of 11:59 p.m. on March 1, 2021, with the exception of pre-established systematic investment and distribution reinvestment plans, as well as for certain discretionary management programs.

To facilitate certain mergers, NBI intends to create new series for certain Continuing Funds. Certain of these series will only be available to securityholders of the Terminating Funds and will be closed to new subscriptions, with the exception of pre-established systematic investment and distribution reinvestment plans.

If the proposed mergers are approved, securityholders of each series of each Terminating Fund will receive units of a series of the corresponding Continuing Fund that has a fee structure which is substantially similar to the fee structure of the existing series. The Terminating Funds will be wound up as soon as possible following the mergers.

As required by securities regulation, NBI presented the conflict of interest matters inherent to the proposed mergers to the Independent Review Committee (IRC) of the NBI Funds. In the context of its mandate, the IRC issued a favourable recommendation and/or approval with respect to the policies proposed by NBI to address these conflicts of interest. The IRC determined that the proposed mergers achieve a fair and reasonable result for the applicable funds. The costs and expenses associated with the mergers are being borne by NBI, not the NBI Funds.

Should securityholders of NBI Real Assets Private Portfolio, NBI High Yield Bond Private Portfolio, NBI Canadian Small Cap Equity Private Portfolio and Meritage Tactical ETF Fixed Income Portfolio vote against the relevant merger, these funds will be terminated on or about June 18, 2021 .

Fee reductions

In conjunction with the proposed fund mergers, NBI intends to reduce the management fee and/or the administration fee charged in respect of certain series of certain Continuing Funds as listed in the tables below, to align with the fees charged to the corresponding series of the Terminating Funds.

Management Fee Changes (effective on or about May 17, 2021 )

Administration Fee Changes (effective immediately)

Termination of H Series and FH Series of the NBI Strategic U.S. Income and Growth Fund

NBI announced the termination of the H and FH Series of the NBI Strategic U.S. Income and Growth Fund on or about May 19, 2021 . The H and FH Series will be closed to new subscriptions as of 11:59 p.m. on March 1, 2021 with the exception of pre-established systematic investment and distribution reinvestment plans.

Fixed-rate administration fee

NBI also announced today that it will begin paying, on or about May 19, 2021 (the "Effective Date"), certain operating expenses of the NBI Jarislowsky Fraser Select Income Fund and the NBI Jarislowsky Fraser Select Canadian Equity Fund (the "NBI JF Funds") in return for the payment to NBI of a fixed-rate administration fee by the NBI JF Funds. The fixed-rate administration fee for every NBI JF Fund series will be less than or equal to the actual operating expenses paid by such NBI JF Fund series during its most recently completed financial year. As the administration fee is a fixed percentage of assets, NBI will bear the risk of any increases in operating expenses, but conversely, it may also benefit from any future decreases in operating expenses. By harmonizing its approach for the NBI JF Funds with the one used by other NBI Funds, NBI seeks to improve and simplify its investors' experience.

The introduction of these fixed-rate administration fees was submitted to the IRC. The IRC considered the proposal and issued a favourable recommendation with respect to the policies proposed by NBI to address the related conflicts of interest and determined that it would achieve a fair and reasonable result for the NBI JF Funds.

Currently, the NBI JF Funds bear all of their operating expenses. As of the Effective Date, the operating expenses payable by NBI will include, but will not be limited to, legal fees, audit fees, custodial costs, transfer agency and recordkeeping costs, accounting and valuation fees, the costs of preparing and distributing financial reports, prospectuses, annual information forms, fund facts, continuous disclosure materials and other investor communications and the costs of trustee services relating to registered tax plans, as applicable. NBI will pay these expenses, provided such expenses are incurred in the normal course of business of the NBI JF Funds.

The fund costs that will continue to be paid by the NBI JF Funds will include taxes, the costs of complying with any change to existing regulatory requirements and/or with any new regulatory requirements, including any new fees introduced after March 1, 2021 , interest and borrowing costs, fees and expenses related to external services that were not commonly charged in the Canadian mutual fund industry as at March 1, 2021 , fees and expenses of the IRC and operating expenses that are incurred outside the normal course of business of the NBI JF Funds.

Securityholders of all series of the NBI JF Funds other than the Advisor Series and T5 Series will receive a written notice providing the details of the introduction of the fixed-rate administration fee, as required by securities regulations. The Advisor Series and T5 Series securities of the NBI JF Funds require securityholder approval prior to implement this change. Advisor Series and T5 Series securities securityholders of record, on or about April 1 st , 2021, will receive Meeting materials for Meetings to be held on or about May 17, 2021 .

The above changes will be reflected in the upcoming amendment to the simplified prospectus for the NBI Funds, which will be available on the SEDAR website ( www.sedar.com ) as well as on the National Bank Investments website ( www.nbinvestments.ca ).

About NBI Funds
NBI Funds (the "Funds") are offered by National Bank Investments Inc., a wholly owned subsidiary of National Bank of Canada . Commissions, trailing commissions, management fees and expenses all may be associated with investments in the Funds. Please read the prospectus of the Funds before investing. The Funds' securities are not insured by the Canada Deposit Insurance Corporation or by any other government deposit insurer. The Funds are not guaranteed, their values change frequently and past performance may not be repeated.

About National Bank Investments Inc.
National Bank Investments Inc. (NBI) is an investment funds management firm committed to manufacturing and offering mutual funds, exchange-traded funds, investment solutions and services designed to help Canadian investors pursue their financial goals. As at December 31, 2020 , assets under management in NBI products were valued at over $67 billion .

Guided by an open architecture strategy, NBI is dedicated to providing diverse solutions to meet the evolving needs of its clients. NBI consistently strives to be recognized as a key partner by combining innovation and excellence. NBI's role is not limited to administrative aspects of management; NBI Advisory Services and its registered representatives form a team of specialists who provide information and advice to help advisors build portfolios adapted to their clients' financial needs. Follow NBI's activities at nbinvestments.ca or via social media such as YouTube and LinkedIn .

National Bank Investments is a member of Canada's Responsible Investment Association and a signatory of the United Nations-supported Principles for Responsible Investment.

About National Bank of Canada
With $344 billion in assets as at January 31, 2021, National Bank of Canada , together with its subsidiaries, forms one of Canada's leading integrated financial groups. It has more than 26,000 employees in knowledge-intensive positions and has been recognized numerous times as a top employer and for its commitment to diversity. Its securities are listed on the Toronto Stock Exchange (TSX: NA). Follow the Bank's activities at nbc.ca or via social media such as Facebook , LinkedIn and Twitter .

SOURCE National Bank of Canada

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