Manulife announces intent to cap sales of 11 corporate class funds and pools

TORONTO, April 9, 2013 /CNW/ - Manulife Mutual Funds announced that effective as of the close of business today, it will no longer accept new or additional investments into 11 of its corporate class funds and pools. This decision has been made in response to the Federal Government's budget announcement on March 21, 2013 which included proposed changes that eliminate certain tax advantages enjoyed by investment funds that employ what are described as "character conversion transactions" - the use of forward agreements to obtain capital gains treatment on returns that would otherwise be fully taxable as ordinary income. Such forward agreements are used by a number of investment funds across the country including the Manulife funds and pools listed below.

Manulife Mutual Funds continues to assess the budget proposal and its potential impact. At this time, it is believed to be in the best interest of existing investors in the funds and pools noted below to suspend further purchases until there is greater guidance from the Federal Government regarding this proposal. Once all of the details are known, Manulife Mutual Funds will determine the best long-term course of action for these funds and pools.

• Manulife Corporate Bond Class
• Manulife Floating Rate Income Class
• Manulife Strategic Balanced Yield Class
• Manulife Strategic Income Class
• Manulife Structured Bond Class
• Manulife Yield Opportunities Class
• Manulife Balanced Private Pool
• Manulife Balanced Income Private Pool
• Manulife Canadian Fixed Income Private Pool 
• Manulife Corporate Fixed Income Private Pool
• Manulife Global Fixed Income Private Pool

Manulife Mutual Funds expects that the tax treatment of its funds that were using forward contracts prior to the budget announcement on March 21, 2013, will remain unchanged for a period of at least 180 days from that date to allow for an orderly transition in response to the budget proposal. During the 180-day transition period, existing investors are expected to continue to receive the same tax treatment they received prior to the budget announcement.

It is important to note that the fundamental benefits of corporate classes remain intact, including tax-deferred switching for investors, the ability of certain corporate classes to pay tax-efficient distributions of ordinary Canadian dividends and/or capital gains dividends, or the ability to potentially reduce or defer taxable distributions.

Investors are encouraged to speak with their financial advisor and/or tax advisor about their options regarding corporate class funds.

About Manulife Mutual Funds
Manulife Mutual Funds, a division of Manulife Asset Management Limited, builds on Manulife Financial's wealth and investment management expertise in managing assets for Canadian investors, through a diverse portfolio of forward-thinking mutual fund products. Our experienced Portfolio Managers offer access to markets in Canada, the United States and around the world, in a range of investment styles to help meet individual needs. Manulife Mutual Funds is part of Manulife Investments, which offers personal wealth management products and services, such as mutual funds, segregated fund contracts, annuities and guaranteed interest contracts. For more information, please visit manulifemutualfunds.ca.

About Manulife Financial
Manulife Financial is a leading Canada-based financial services group with principal operations in Asia, Canada and the United States. Clients look to Manulife for strong, reliable, trustworthy and forward-thinking solutions for their most significant financial decisions. Our international network of employees, agents and distribution partners offers financial protection and wealth management products and services to millions of clients. We also provide asset management services to institutional customers. Funds under management by Manulife Financial and its subsidiaries were C$532 billion (US$535 billion) as at December 31, 2012. The Company operates as Manulife Financial in Canada and Asia and primarily as John Hancock in the United States.

Manulife Financial Corporation trades as 'MFC' on the TSX, NYSE and PSE, and under '945' on the SEHK. Manulife Financial can be found on the Internet at manulife.com. 

SOURCE: Manulife Financial Corporation