TORONTO, Sept. 19, 2014 /CNW/ - CIBC Asset Management Inc. (CAM), the manager of the Renaissance Investments family of mutual funds, today announced plans to merge the Renaissance Corporate Bond Fund (the "Terminating Fund") with the Renaissance Corporate Bond Capital Yield Fund (the "Continuing Fund"). Following the proposed merger, the name of the Continuing Fund will be changed to Renaissance Corporate Bond Fund. The changes are expected to be effective on or about December 5, 2014.
The proposed merger is a result of changes announced in the 2013 federal budget that included provisions to eliminate the tax benefits associated with forward agreements. Forwards are used by certain investment funds to achieve capital gains treatment on investment returns that would otherwise be treated as income. The Renaissance Corporate Bond Capital Yield Fund was designed to include exposure to forward agreements as part of its investment strategy. Due to the change in tax treatment, the Continuing Fund will cease to use forward agreements and CAM has proposed that it is in the best interests of unitholders to merge the Funds. Under the proposed merger, unitholders of the Terminating Fund will receive units in the same class of the Continuing Fund.
As part of the proposed merger, it is the intention that the investment objective of the Continuing Fund change to remove reference to the generation of tax-efficient returns that utilize forward agreements. CAM has applied to the relevant securities regulators for exemptive relief to permit the investment objective to be changed without seeking unitholder approval.
The Independent Review Committee of the Funds has considered and approved the proposed merger and provided a positive recommendation on the proposed investment objective change.
The Continuing Fund was closed to new purchases and switches effective August 23, 2013 in connection with the changes announced in the 2013 Federal Budget. Following the merger, the Continuing Fund will be open to new purchases and switches.
The Terminating Fund will be wound-up as soon as reasonably possible following the merger.
About CIBC Asset Management
CIBC Asset Management (CAM), the asset management subsidiary of CIBC, provides a range of high-quality investment management services and solutions to retail and institutional investors. CAM's offerings include: a comprehensive platform of mutual funds, strategic managed portfolio solutions, discretionary investment management services for high-net-worth individuals, and institutional portfolio management. CAM is one of Canada's largest asset management firms, with over $100 billion in assets under management as of June 30, 2014.
SOURCE: Canadian Imperial Bank of Commerce
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