TORONTO, March 3, 2016 /CNW/ - TD Asset Management Inc. ("TDAM"), the manager of TD Corporate Bond Capital Yield Fund (the "Fund"), today announced changes to the investment objectives and name of the Fund.
On March 21, 2013, the Federal Budget announced the elimination of certain tax benefits for investment funds that use forward contracts to convert income to capital gains for tax purposes. The Budget described this structure as "character conversion transactions". In April 2013, TDAM announced that the Fund was closed to new investments as of April 5, 2013 due to the Fund's use of character conversion transactions.
Effective on or about August 31, 2016 (the "Effective Date"), TDAM will change the investment objectives of the Fund (the "Objectives Changes") to invest primarily in, or obtain exposure to, North American and/or international corporate bonds and other debt instruments ("corporate bonds"). The Fund will achieve its investment objectives by primarily investing in corporate bonds and may also obtain exposure to corporate bonds through exchange-traded funds. The existing forward contract of the Fund, which is set to mature on September 7, 2016, will be closed on the Effective Date in accordance with the Objectives Changes. While the Fund currently pays a steady distribution rate that is reset annually, effective September 1, 2016, the Fund will begin paying a variable distribution rate. The Fund will change its name to TD Corporate Bond Plus Fund and will be re‑opened to new investments on or about September 1, 2016.
TDAM has been granted exemptive relief from the requirement to obtain unitholder approval for the change in the Fund's investment objectives. No less than 60 days before the Effective Date, unitholders will be sent written notice explaining the rationale for the changes and that the Fund will no longer be able to provide tax-advantaged returns after the Effective Date. In addition to these changes, effective March 3, 2016, the Fund will make a special distribution consisting of capital gains to applicable unitholders.
For more information, or to see the applicable TD Mutual Funds prospectus, visit tdam.com.
About TD Asset Management Inc.
TD Asset Management (TDAM), a member of TD Bank Group, is a North American investment management firm. Operating through TD Asset Management Inc. in Canada and TDAM USA Inc. in the U.S., TDAM brings new thinking to investors' most important challenges. TDAM offers investment solutions to corporations, pension funds, endowments, foundations and individual investors. Additionally, TDAM manages assets on behalf of almost 2 million retail investors and offers a broadly diversified suite of investment solutions including mutual funds, professionally managed portfolios and corporate class funds. Collectively, TDAM manages over C$300 billion in assets as at December 31, 2015.
SOURCE TD Asset Management Inc.
For further information: Ana Aujla, TD Bank Group, 416-542-0211, firstname.lastname@example.org