Winnipeg-based Investors Group has capped two funds following proposals in the recent 2013 federal budget signaling the end to character conversion transactions.

Until there is greater guidance from the federal government, the company says Investors Short Term Capital Yield Class and Investors Capital Yield Class will be closed to new lump sum investments, effective immediately.

While the government has not yet provided full clarity on how it plans to implement the proposal, derivative transactions currently in place on the funds prior to March 21, 2013, are expected to remain tax-efficient until their expiration dates.

Investors Group says it will continue to monitor and assess the budget proposal and its potential impact.

Investors Group is a member of the IGM Financial Inc. (TSX:IGM) group of companies.