Manulife Strategic Income Opportunities Fund (MSO.UN), a closed-end fund managed by Toronto-based Manulife Asset Management Ltd, will cease distributions in June.

The fund currently uses a derivative strategy that converts interest income into a capital gain, thereby lowering the taxes on distributions to unit holders. This strategy is known as a “character conversion transaction.” The federal government, however, proposed changes in the March budget to prohibit the use of such a strategy in mutual funds.

Distributions for the fund will end with the expiration of its forward agreement in June. The final distribution for unit holders of record will take place on June 26.