TSX Symbol: CIX
TORONTO, Oct. 28, 2014 /CNW/ - CI Investments Inc. ("CI") announced today that it is revising the investment objectives of a number of its funds in response to tax law changes announced in the March 2013 federal budget.
The affected funds use forward agreements that result in income generated by a fund being characterized as capital gains, which are taxed at half the rate of interest income. The forward agreements are also known as "character conversion transactions." Under the March 2013 budget measures, future returns generated by forward agreements will be treated as fully taxable income rather than as capital gains. Forward agreements that were in place before the budget were allowed to maintain their favourable tax treatment until they expire.
CI has decided that when the funds' forward agreements expire, they will no longer use forward agreements but will invest directly in the portfolio of securities or other mutual funds to which each fund currently links its returns. After the change, the funds will no longer benefit from the tax advantages provided by the forward agreements and it is expected that the funds' future returns will be primarily in the form of fully taxable income. The funds' investment objectives will be revised to reflect this change, and CI expects to receive the appropriate regulatory approvals to make these investment objective changes without the approval of securityholders, subject to certain conditions.
The affected funds are:
- Cambridge Income Corporate Class
- Cambridge Income Fund
- CI Global High Dividend Advantage Corporate Class
- CI Global High Dividend Advantage Fund
- CI Short-Term Advantage Corporate Class
- Signature Diversified Yield Corporate Class
- Signature Diversified Yield Fund
- Signature High Yield Bond Corporate Class
- Signature High Yield Bond Fund
These funds' forward agreements expire in December 2014 or January 2017, depending on the fund. They remain closed to new deposits with the exception of automatic investment plans established prior to April 15, 2013. The complete wording of the current and revised investment objectives, and the timing of the changes are contained in a notice being sent to securityholders.
About CI – Canada's Investment Company
CI Investments Inc. is one of Canada's largest investment management companies. CI offers a broad range of investment products and services, including an industry-leading selection of investment funds, and is on the Web at www.ci.com. CI is a subsidiary of CI Financial Corp. (TSX: CIX), an independent, Canadian-owned wealth management firm with $130 billion in assets as of September 30, 2014.
SOURCE: CI Financial Corp.
For further information: Murray Oxby, Director, Communications, CI Investments, [email protected] or 416-364-1145