By Morningstar Canada | 12/04/12

Christine Hughes, who resigned in January 2010 from AGF Investments Inc., has resurfaced as a sub-advisor to NEI Investments. NEI announced on April 11 an exclusive retail investment-management agreement with OtterWood Capital Management Inc., a Toronto firm founded by Hughes. Her initial role will be to serve as sub-advisor of Ethical Balanced.

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OtterWood is scheduled to assume responsibility for managing the $330-million Ethical Balanced on May 14. As of that date, NEI will revise the fund's strategies to conform to Hughes's investment approach.

Hughes will be given flexibility to adjust between asset classes based on her market views. The fund will also be allowed to use a wider array of derivatives, hold exchange-traded funds, and engage in short-selling. NEI will also seek regulatory approval to permit the fund to invest up to 10% of its assets in precious metals.

NEI also announced that investors will be asked on May 29 to approve changes in the objectives of Northwest Specialty Innovations and Northwest Specialty Innovations Corporate Class. The funds have been closed to new purchases, effective immediately.

Subject to approval of these changes, NEI plans to reopen the funds in July under their new all-cap, industry-diversified mandate to invest in Canadian equities, with Hughes's firm as sub-advisor. Since inception the Specialty Innovations mandate, which invests heavily in technology stocks, is managed by Robert McWhirter of Toronto-based Selective Asset Management Inc.

Daniel Solomon, chief investment officer at NEI, said in a release that Hughes has demonstrated an ability to add value by blending macroeconomic assessment with quality stock selection. Hughes managed AGF Canadian Asset Allocation  , formerly named AGF Canadian Balanced, for more than 10 years.

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