TORONTO, June 18, 2013 /CNW/ - Return On Innovation Advisors Ltd. ("ROI Capital"), the manager of ROI Canadian High Income Mortgage Fund (TSX: RIH.UN) (the "Fund"), announced today that a monthly cash distribution of $0.050 per unit will be paid on July 15, 2013 to unitholders of record of the Fund on June 28, 2013.
As previously announced, the March 2013 federal budget included proposed changes to eliminate character conversion transactions using forward agreements, affecting many funds in Canada that pursue tax advantaged distribution strategies, including the Fund whose units are traded on the Toronto Stock Exchange.
The Fund previously disclosed that while the current forward agreement remains in place, the tax advantaged treatment of the monthly scheduled cash distributions will continue until the Fund's forward agreement matures on January 16, 2017. After the expiry of its current forward agreement, all scheduled distributions by the Fund are expected to consist principally of ordinary income.
"Doing what is best for our unitholders is our paramount consideration. We have communicated openly, consistently and transparently about the Fund's value and holdings and we will continue to do so," said ROI Capital President and Founding Partner, Wilfred Vos. "The investments in the Fund remain sound and the portfolio continues to perform as expected and is well positioned to meet our distribution targets for the rest of the year."
ROI Capital does not anticipate at this time that the Fund's current forward agreement would be settled in whole prior to its scheduled maturity on January 16, 2017. The capital gains in the Fund's forward agreement as of May 31, 2013, net of any current capital tax loss carry-forwards on a per unit basis, are approximately $1.70 per unit. Whether the Fund will realize a capital gain of this size on the settlement in whole of the Fund's forward agreement when such settlement actually occurs, or as a result of other portfolio activity from time to time, is uncertain and will depend on a number of factors, including the performance of the Fund's investments.
ROI Capital is continuing to work with its lawyers and tax advisors to assess the consequences for the Fund and its unitholders of the proposed changes for forward agreements under the March 2013 federal budget. ROI Capital will continue to examine the potential implications of the proposed changes in the budget for the Fund and its unitholders and possible changes for the Fund resulting from such implications and will continue to act in the best interest of unitholders in addressing the new circumstances.
Certain statements included in this news release constitute forward-looking statements. The forward-looking statements are not historical facts but reflect current expectations regarding future results or events. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. ROI Capital undertakes no obligation to update publicly or otherwise revise any forward looking statement whether as a result of new information, future events or other such factors which affect this information, except as required by law. Investment funds are not covered by the Canada Deposit Insurance Corporation or by any other government deposit insurer. There is no guarantee that an investment in the Fund will earn any positive return in the short or long term nor is there any guarantee that the Fund's investment objectives will be achieved or that the net asset value per unit will appreciate or be preserved.
SOURCE: ROI Capital
For further information:
Wilfred Vos Bcs, FMA, CIM, CFP, FCSI, DMS, CBV, MBA, CFA
President & Founding Partner