Middlefield's Proposed ETF Name Changes and Strategy Shift

Middlefield's Proposed Changes to ETFs

Middlefield Limited is taking a significant step by announcing its intention to revise the names and investment strategies for two of its ETFs: Middlefield Sustainable Global Dividend ETF (TSX:MDIV) and Middlefield Sustainable Infrastructure Dividend ETF (TSX:MINF). This shift indicates a notable change in how these funds will approach investment criteria, particularly concerning environmental, sustainability, and governance (ESG) factors.

New Focus and Strategy Adaptation

The management has emphasized that while ESG factors will still be considered when selecting issuers, they will no longer be the predominant criteria over other essential aspects such as valuation, growth projections, and management quality. This decision reflects a broader trend observed in the investment sector where many asset managers are recalibrating their investment priorities.

Impact on Fund Names

As part of this strategy, Middlefield aims to enhance the investment profile of the Funds. The current name of the Middlefield Sustainable Global Dividend ETF will change to Middlefield Global Dividend Growers ETF, while the Middlefield Sustainable Infrastructure Dividend ETF will be renamed to Middlefield Global Infrastructure Dividend ETF. This reflects a more inclusive approach to investment opportunities.

Broader Market Trends

The shift towards a reduced emphasis on ESG factors is not isolated to Middlefield. Major asset management firms such as BlackRock and JPMorgan are also adjusting their ESG strategies. Recent findings from Morningstar indicate a trend where a larger number of funds are distancing themselves from restrictive ESG mandates, unknowingly opening the field to more diverse investment options.

Regulatory Context and Future Directions

Furthermore, the Canadian Securities Administrators have introduced new classifications for ESG-related funds that include ESG Objective Funds, ESG Strategy Funds, and ESG Limited Consideration Funds. The Manager believes that the revised approach of Middlefield’s Funds will qualify them for the ESG Limited Consideration category. This categorization aims to provide clearer guidelines on how various funds integrate ESG considerations into their investment models.

Next Steps for Fund Holders

Unitholders of the Funds are expected to participate in special meetings to be held to discuss and approve these changes. These meetings, slated for January 30, 2025, will allow unitholders to vote on the proposed revisions. Detailed information surrounding these changes, including the updated investment objectives and strategies, will be disseminated through an information circular prior to the meetings.

About Middlefield

Middlefield, established in 1979, is a seasoned asset manager specializing in equity income. The firm operates from Toronto and London, utilizing robust active management strategies to curate investment portfolios across various sectors. Their offerings are diversified, including ETFs and mutual funds, emphasizing proven dividend-focused strategies spanning multiple industries.

Contact Information

For further inquiries, interested parties can reach out to Nancy Tham in the Sales and Marketing Department at 1.888.890.1868 for assistance.

Frequently Asked Questions

What changes are being made to the fund names?

The Middlefield Sustainable Global Dividend ETF will be renamed to Middlefield Global Dividend Growers ETF, while the Middlefield Sustainable Infrastructure Dividend ETF will change to Middlefield Global Infrastructure Dividend ETF.

How will the changes affect investment strategies?

The revised strategies will prioritize valuation, management quality, and growth projections instead of placing the same emphasis on ESG factors as before.

What is the rationale behind reducing ESG considerations?

The shift is part of a larger trend within asset management that aims to broaden investment options and potentially yield better returns for investors.

When will the special meetings for unitholders take place?

Special meetings are scheduled for January 30, 2025, where unitholders will vote on the proposed changes.

Who can provide more information about these changes?

Interested individuals can contact Nancy Tham at 1.888.890.1868 within Middlefield's Sales and Marketing Department for more details.

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