Connor, Clark & Lunn Capital Markets Inc. today announced the launch of CC&L Tax-Efficient Notes.
The BMO CC&L Bond Deposit Notes Series 1 are the first offering of CC&L Tax-Efficient Notes and are linked to the top-performing CC&L Core Plus Bond Fund. Connor, Clark & Lunn Investment Management Ltd., provides investment management for the fund.).
Issued by Bank of Montreal, the notes are available in two classes. Designed for non-registered income portfolios, the R.O.C. Yield Class Notes use return of capital to create tax-efficient potential distributions compared to traditional fixed income investments, while the Total Return Class Notes provide the power of compounding by reinvesting potential distributions for additional capital appreciation.
The R.O.C. Yield Class Notes are designed for investors seeking monthly cash flow, distributions will be calculated at a rate equal to 75% of the net distribution rate of the fund, and paid monthly as a return of capital. There is no tax on return of capital distributions – instead, the adjusted cost base of the notes will be reduced. The average annualized monthly net distribution rate of the fund for the 12 months ending Nov. 30, 2006 of 5.15% would have resulted in average annualized R.O.C. Yield Class distributions of 3.87%. Excess returns remain invested for growth.
The Total Return Class Notes are designed for investors seeking to maximize growth in a tax-efficient manner from an income investment. Returns remain invested to further enhance growth potential, and should not trigger a current-year tax liability.
“Exposure to high performing fixed income assets is prudent for any well diversified portfolio,” said Neil Murdoch, CEO of CC&L Capital Markets, in a news release. “Unfortunately, high tax rates on traditional fixed income securities can reduce their effectiveness for taxable portfolios. We’re excited to offer a solution that has the potential to leave more after-tax money in the hands of investors.”
According to Peter Loach, vp and managing director of fund research at BMO Nesbitt Burns, “For taxable investors, the CC&L Bond Deposit Note is an effective alternative to traditional bond funds or for the four to five year portion of a fixed income bond ladder.”
The BMO CC&L Bond Deposit Notes Series 1 are available for sale until Feb. 2, 2007 and will mature on April 13, 2012.
CC&L Tax-Efficient Notes make their debut
BMO CC&L Bond Deposit Notes linked to CC&L Core Plus Bond Fund
- By: IE Staff
- January 23, 2007 January 23, 2007
- 11:55