Fund available in three classes of shares

AIC Limited today announced the launch of a new mutual fund, AIC Canadian Income Choice Fund.

The fund provides investors with a choice of income stream but also provides flexibility in how that income stream is taxed in order for individual investors to achieve maximum tax efficiency.

“AIC has been a leader in providing tax efficient mutual funds for more than 20 years,” says Jonathan Wellum, CEO and chief investment officer. “As more and more Canadians work with their financial advisors to select funds that pay a distribution, AIC wanted to provide these investors with a unique alternative — one that combines an income stream choice with a tax choice tailored to each investor’s unique needs.”

AIC Canadian Income Choice Fund is available in three classes of shares: Capital Growth Shares; Capital Gains Shares; and Canadian Dividend Shares.

“With AIC Canadian Income Choice Fund set up in a corporate structure, investors can switch classes of shares without triggering taxes,” said Milan Legris, managing director, AIC Tax and Estate Planning Group. “This is a great feature because investors’ needs change with time. Some investors may only want growth of capital and, in fact, may not want to receive income distributions until a later point in their life. Other investors may seek to have an annual distribution but then want to switch to quarterly distributions.”

The new fund will be managed by AIC’s portfolio management team and will invest primarily in publicly traded common and preferred shares of Canadian corporations, as well as fixed income securities of governments and Canadian companies. The fund may also invest in royalty and income trusts.

Investors who choose the Capital Growth Shares through the AIC Canadian Income Choice Fund will not receive any distributions. Investors have the potential for capital appreciation via increases in the net asset value of the fund’s units.

Investors who choose the Capital Gains Shares would receive a capital gains distribution on an annual basis. The maximum target distribution paid to this share class would be up to a maximum of 12% of the net asset value per share (NAVPS) of the class.

Investors who choose the Canadian Dividend Shares would receive Canadian dividend distributions on a quarterly basis. The maximum target distribution paid out by this class would be up to a maximum of 10% (annually) of the NAVPS of the class.

All three series of shares may also receive “residual distributions” annually, if required. Residual distributions refer to the total taxable distributions required to be paid in order for the fund to qualify for all available tax refunds, after the maximum target distributions have been met by the Canadian Dividend Shares and Capital Gains Shares.