TORONTO, March 3, 2016 /CNW/ - Capital International Asset Management (Canada), Inc. ("Capital Group") today announced a proposal to change the way expenses are charged to its mutual funds (the "Funds"), effective on or about July 1, 2016. For Series A, B, D and T4 units of the Funds, this change is subject to unitholder approval. For all other applicable series, unitholders will receive written notice including further details of the change at least 60 days before implementation.
"We're proposing a fixed-rate administration fee, which simplifies the way operating expenses are charged. It improves transparency and ensures that certain fees are fixed," said Mark Tiffin, President of Capital Group in Canada.
Currently, each of the Funds pays its own operating expenses. Under the proposed structure, Capital Group will pay certain operating expenses while charging the Funds a fixed-rate annual administration fee in return (for all series except Series O). This administration fee will be calculated under one of three tiers, depending on a Fund's total net assets (less than $500 million; $500-$1 billion; greater than $1 billion). As a Fund's net assets surpass each tier, the administration fee will decline, allowing investors to realize economies of scale as Fund assets grow.
In fixing a large portion of the operating expenses based on each Fund's net assets, Capital Group aims to protect investors from potential increases in these operating expenses.
Capital Group referred this proposal to the Funds' Independent Review Committee, which determined, subject to certain conditions, that the proposal would achieve a fair and reasonable result for the Funds.
The operating expenses payable by Capital Group under this proposal are detailed in the amendment to the Funds' simplified prospectus. Each Fund will continue to pay certain fund costs, also outlined in the prospectus amendment.
Unitholders of Series A, B, D and T4 of the Funds will receive further information about the proposal in meeting materials in late-April 2016. They will be asked to approve the proposal at special unitholder meetings to be held on or about May18, 2016, as required by securities regulations. Information about the proposed change will be available in an amendment to the Funds' simplified prospectus to be filed in connection with these changes, which will be available at www.sedar.com and thecapitalgroup.com/ca.
About Capital Group
Capital International Asset Management (Canada), Inc. and Capital Group funds are part of Capital Group, a global investment management firm originated in Los Angeles, California in 1931. Since that time, Capital Group has been singularly focused on delivering superior, consistent results for long-term investors using high-conviction portfolios, rigorous research and individual accountability. Today, Capital Group manages more than US$1.39 trillion in long-term assets for millions of individual and institutional investors around the world, as of December 31, 2015.
SOURCE Capital International Asset Management (Canada), Inc.
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For further information: Mark Tiffin, President, (416) 815-2128, Email: email@example.com, Website: thecapitalgroup.com/ca; or: Hannah Coan, Vice President, Media Relations, (213) 615-5199, Email: firstname.lastname@example.org, Website: thecapitalgroup.com/ca