UBS Global Asset Management (Canada) Co., as manager of both UBS Global Allocation Trust (GAT) and UBS Total Return Trust (UTR) has announced that it is holding special meetings of unitholders on May 15 to consider a proposed merger of the tow funds.

Under the proposed merger, the portfolio of UTR would be combined with that of GAT. UTR unitholders would receive units of GAT on a tax-deferred rollover basis in exchange for their units of UTR based on the respective net asset values of UTR and GAT on the merger date.

Unitholders of GAT will also be asked to approve the expansion of the guidelines for GAT.

UBS says a merger of the funds would increase the assets in the merged fund to approximately $92 million (based on current valuations). The merged fund would benefit from a higher market capitalization, potential increased liquidity on the Toronto Stock Exchange, and lower management and administration costs per unit.

Additional details regarding the proposed merger will be outlined in a joint information circular that will be sent in early April.

If approved, the proposed merger is expected to occur by June 30, subject to TSX and regulatory approval.

Unitholders of UTR who do not wish to participate in the planned merger and become unitholders of GAT will have the opportunity to redeem their units before the merger occurs.