Canoe Financial Announces Changes to Mutual Funds Impacted by the 2013 Federal Budget Announcement
CALGARY, ALBERTA - April 26, 2013 – Canoe Financial LP, one of the fastest growing mutual fund companies in Canada, today announced changes to four of its mutual funds impacted by the recent March 21, 2013 Federal Budget. In the budget, the government proposed to eliminate the tax benefits associated with forward contracts used by some investment funds to achieve capital gains treatment on income that would otherwise be classified as ordinary income, referred to as “character conversion transactions.” The budget proposal applies to any forward contracts with terms exceeding 180 days that are entered into on or after March 21, 2013.
Given the current low interest rate environment and the inability to upsize the forward, Canoe Financial has determined that the cost of the character conversion transactions outweigh the tax advantage to investors. As a result, Canoe Financial has terminated the forward contract for Canoe Bond Advantage Class and is in the process of terminating the forward contract for Canoe Enhanced Income Class. Neither Canoe Bond Advantage Class nor Canoe Enhanced Income Class will enter into any further character conversion transactions. Canoe Strategic High Yield Class and Canoe North American Monthly Income Class have not, and will not, enter into forward contracts. Instead, all four of these funds will invest primarily in securities similar to those held by their reference fund and/or, subject to regulatory approvals, in securities of their reference fund. An application is being made to Canadian securities regulators to permit the amendment to the investment objectives to remove all references to the character conversion transactions and allow for direct investment in the reference fund or in securities of mutual funds. Canoe Financial will not cap sales on any of its mutual funds.
It is important to note that the budget measures do not directly affect the structure of mutual fund corporations, or corporate class funds. The fundamental benefits of corporate class funds remain, including tax-deferred switching and re-balancing between funds.
About Canoe Financial LP
Canoe Financial is an investment management firm focused on building financial wealth for Canadians through investing in Canada. Its ‘GO CANADA!’ investment thesis reflects Canoe’s strategic confidence in Canada as a place to invest. With continued global urbanization, increasing worldwide demand for resources, and Canada’s sound fiscal structure, Canoe believes this country provides long-term growth potential for investors.
Canoe is one of Canada’s fastest-growing mutual fund companies and currently manages approximately $1.7 billion in assets as at March 31, 2013 through its investment products. To learn more about Canoe Financial, visit www.canoefinancial.com.
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Important information regarding the Funds, including conditions of purchase, investment strategy, distribution policy, management fees, and expenses, are set out in the Funds' Simplified Prospectus and Annual Information Form which are available on Canoe’s website at www.canoefinancial.com or SEDAR at www.sedar.com. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed and their values change frequently. These funds are new and there is no history of performance associated with these Funds. This communication is for information purposes only and is not to be construed as a public offering to sell, or a solicitation of an offer to buy securities. Such an offer can only be made by way of a prospectus or other applicable offering document which should be read carefully before making any investment. Investors should consult their Investment Advisor for complete details and risk factors on specific strategies and various investment products.
This communication may contain forward-looking statements which involve known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated, and should not be unduly relied upon. Canoe does not undertake any obligation to publicly update or revise any forward-looking statements. Market conditions may change and Canoe accepts no responsibility for individual investment decisions arising from the use or reliance on the information contained herein.