TORONTO, ONTARIO--(Marketwired - Jan. 9, 2015) - (TSX:CHB) - BlackRock Asset Management Canada Limited ("BlackRock Canada"), an indirect, wholly-owned subsidiary of BlackRock, Inc. ("BlackRock"), is confirming the previously announced expiry of the legacy equity forward agreement (the "Forward") of the iShares Advantaged U.S. High Yield Bond Index ETF (CAD-Hedged) ("CHB") effective today.
As previously announced, in response to recently enacted taxation rules that target certain financial arrangements that would deem gains on the settlement of certain forward agreements to be included in ordinary income rather than treated as capital gains (the "DFA rules"), CHB implemented an interim hybrid investment strategy. Through this strategy, the fund continued to maintain exposure to constituent securities of the Barclays U.S. High Yield Very Liquid Index (hedged CAD) (the "Index") indirectly through the use of the Forward, and invested the proceeds from the sale of new units of CHB directly in constituent securities of the Index.
Given the expiry of the Forward, as disclosed in the fund's prospectus, CHB will now invest directly in constituent securities of the Index or otherwise in a manner that causes CHB to replicate the performance of the Index. CHB does not expect to seek to replicate the performance of the Index by entering into any forward agreements that will be subject to the DFA rules. CHB's future distributions are expected to be fully taxable as ordinary income (net of allowable expenses) and unitholders will no longer benefit from the tax-advantaged (i.e. capital gain) character of the portion of CHB's distributions that were funded through the partial settlement of the Forward.
In order to reflect the expiry of the Forward, CHB's fund name has been changed to the iShares U.S. High Yield Fixed Income Index ETF (CAD-Hedged).
About BlackRock
BlackRock is a leader in investment management, risk management and advisory services for institutional and retail clients worldwide. At September 30, 2014, BlackRock's AUM was US$4.525 trillion. BlackRock helps clients meet their goals and overcome challenges with a range of products that include separate accounts, mutual funds, iShares® (exchange-traded funds), and other pooled investment vehicles. BlackRock also offers risk management, advisory and enterprise investment system services to a broad base of institutional investors through BlackRock Solutions®. Headquartered in New York City, as of September 30, 2014, the firm had approximately 12,100 employees in more than 30 countries and a major presence in key global markets, including North and South America, Europe, Asia, Australia and the Middle East and Africa. For additional information, please visit the Company's website at www.blackrock.com/ca - Twitter: @BlackRockCA - Blog: www.blackrockblog.com/can
About iShares
iShares is a global leader in exchange-traded funds (ETFs), with more than a decade of expertise and commitment to individual and institutional investors of all sizes. With over 700 funds globally across multiple asset classes and strategies and more than US$1 trillion in assets under management as of September 30, 2014, iShares helps clients around the world build the core of their portfolios, meet specific investment goals and implement market views. iShares funds are powered by the expert portfolio and risk management of BlackRock, trusted to manage more money than any other investment firm.
iShares® Funds are managed by BlackRock Asset Management Canada Limited. Commissions, management fees and expenses all may be associated with investing in iShares Funds. Please read the relevant prospectus before investing. The ETFs are not guaranteed, their values change frequently and past performance may not be repeated. Tax, investment and all other decisions should be made, as appropriate, only with guidance from a qualified professional.
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