| Mackenzie
Review of Segment Operating Results
FEE AND NET INVESTMENT INCOME Management fees
were $554.7 million for the year ended December 31,
2003, a decrease of $37.9 million from $592.6 million
in 2002. This decline is consistent with the 4.3% decrease
in Mackenzie’s average mutual fund assets under
management and the decline in the average management
fee rate, a result of an increase in the percentage
of assets in money market and fixed income funds which
have a lower management fee rate than equity based funds.
Also contributing to the decrease as compared to last
year was $4.3 million of income from hedging activities
related to Mackenzie’s mutual fund assets which
were included in management fees in 2002.
Administration fees include the following main components:
operating expenses charged to funds; fees earned from
administering the VenGrowth Labour Sponsored Venture
Capital Funds; and trustee and other administration
fees generated from the MRS Group account administration
business. Administration fees increased by $1.8 million
to $148.5 million in 2003 compared to $146.7 million
in 2002. This increase is primarily attributable to
the administration fees earned by M.R.S. Trust for assuming
responsibility for a portion of the Mackenzie and Investors
Group mutual fund RRSP Clone counterparty activity.
M.R.S. Trust began providing this service in December
2002 for the Mackenzie funds and in April 2003 for the
Investors Group funds.
Distribution revenue, which represents fees earned
on the redemption of mutual fund units sold on a deferred
sales charge basis for which Mackenzie was the primary
distributor, decreased $4.7 million to $39.6 million
from $44.3 million in the previous year. This decrease
is consistent with the decline in the redemption of
mutual fund units that were subject to a redemption
fee.
Net investment income and other represents the net
interest margin from M.R.S. Trust’s lending and
deposit operations. Net investment income in 2003 was
$19.9 million, an increase of $2.3 million from $17.6
million in 2002. The increase in the current year is
attributed to a gain realized on the disposition of
real estate held for sale. There is no corresponding
gain in the previous year’s results.
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