TD Asset Management Inc. Announces Intention to Cap Sales of the TD Corporate Bond Capital Yield Fund, TD Fixed Income Capital Yield Pool Class and TD Global High Yield Capital Class
TORONTO, April 3, 2013 /CNW/ - The March 21, 2013 federal budget
included measures that would eliminate certain tax benefits in
investment funds that use forward contracts to convert income to
capital gains for tax purposes. The budget describes this structure as
"character conversion transactions."
Because the following funds employ these transactions, TD Asset
Management Inc. (TDAM) has made the decision to protect existing
unitholders and no longer accept additional investments to these funds
as of the close of business Friday, April 5, 2013:
-
TD Corporate Bond Capital Yield Fund
-
TD Fixed Income Capital Yield Pool Class
-
TD Global High Yield Capital Class
Although TDAM is seeking further clarification from the federal
government regarding the budget measures, it appears that increasing
the size of existing character conversion transactions is not
permitted. For existing unitholders we believe there will be no change
in tax treatment for a minimum of 180 days from March 21, 2013 and as a
result of this change there is no reason to redeem their units.
It is important to note that the budget measures do not directly impact
the corporate class structure. The key benefits offered by TD Mutual
Funds' Corporate Class remain, including the ability to defer capital
gains taxes when switching between classes and the ability to
potentially minimize taxable distributions.
Existing unitholders of these funds are encouraged to speak with their
financial advisor about their investment options.
About TD Asset Management Inc.
Under the TD Mutual Funds name, TD Asset Management (TDAM) provides a
diverse range of 70 mutual funds, 26 professionally managed
portfolios and 20 corporate class funds. TDAM manages retail mutual
fund assets on behalf of more than 1.7 million investors and TD Mutual
Funds is one of the most broadly diversified fund families in Canada.
Funds are available at TD Canada Trust branches (through TD Investment
Services Inc. representatives), TD Direct Investing, TD Wealth
Financial Planning and TD Wealth Private Investment Advice, as well as
leading investment dealers, independent brokers, advisors and financial
planners. As of February 28, 2013, TDAM was the fourth largest mutual
fund company in Canada, with $73.1 billion invested in TD Mutual Funds.
SOURCE: TD Asset Management Inc.
For media inquiries, please contact:
Amanda Tran
TD Bank Group
416-983-7212
amanda.tran@td.com