TORONTO, ON, May 26, 2004 - ClaringtonFunds Inc. ("Clarington")
today announced that it will adopt the Fair Value Pricing Model of
ITG Inc. ("ITG") for international securities held in its
funds.
Clarington is one of the first Canadian mutual fund companies to
adopt an independent Fair Value Pricing Model to mitigate against
the potential negative effects of market timing on its funds. Such
market timing trading can potentially strip gains from long-term
investors and increase transaction costs to the funds.
ITG is an international leader in the provision of
technology-based equity trading services. Its Fair Value Pricing
Model provides mutual funds with an objective method of valuing
foreign securities when significant events that could affect
pricing occur after foreign markets close and before net asset
value (NAV) is calculated.
ITG's Fair Value Pricing Model calculates fair value adjustment
factors by 4:30 p.m. ET each trading day. The model uses relevant
information captured between the time of foreign market closures
and the close of North American markets to create fair value
adjustment factors for over 34,000 stocks in 43 markets outside
North America. In rigorous testing, the model has significantly
reduced the opportunity for market timing by generating price
adjustments that better approximate the next trade of fund
holdings.
Clarington Chairman and Founder Terry Stone said that the
adoption of ITG's Fair Value Pricing Model is "the important final
element of a three-step program to safeguard the interests of
investors in our mutual fund products. Our objective with this
program is to assure investors in our funds that we are taking
pro-active steps to protect their investments from the negative
impact of market timing behavior."
Mr. Stone noted that Clarington has previously introduced two
measures to deter short-term trading on its funds, including:
- a 2% fee charged to investors who redeem or switch any of the
firm's International, Global or Small Cap funds within 30 days of
purchase; and
- a 2% fee, which may be charged to investors who redeem or
switch securities of any other Clarington funds, except the
Clarington Canadian Money Market Fund and Clarington Short Term
Income Class, within 90 days of purchase. Clarington may also
redeem or reject future purchases of investors that display
excessive trading activity."Investors in Clarington will now enjoy
combined protections against market timing and short-term trading
that are second to none in Canada," Mr. Stone said.
"We are delighted that ClaringtonFunds has chosen to adopt our
Fair Value Pricing Model for its mutual funds," said Ken Hight,
President and CEO of ITG Canada.
"This product, which was developed with input from our clients,
is important for mutual funds with international holdings in time
zones outside North America where significant changes in value can
occur after foreign markets close. We expect that its adoption by
Clarington will lead to more widespread use of this important
analytic tool in the Canadian marketplace," Mr. Hight said.
About ITG
Headquartered in New York, ITG is a leading international
provider of technology-based equity trading services and
transaction research to institutional investors and brokers. ITG is
known as the leader in advanced technologies that help institutions
and broker/dealers find liquidity and reduce transaction costs in
the pursuit of best execution. ITG Canada Corp. brings that
expertise to institutional investors and brokers who deal in the
Canadian, U.S. and international markets. The firm's web site
address is www.itginc.com.
About ClaringtonFunds
Founded in 1995, ClaringtonFunds Inc. currently has more than
Can.$3.6 Billion in assets in 35 mutual funds. All of Clarington's
mutual funds are advised by well-known Canadian and international
portfolio managers. Based in Toronto, the company maintains a
national presence across Canada with regional offices in Vancouver,
Calgary, Ottawa and Montreal.