CI Investments says that it will be terminating 36 of its 100% RSP-eligible foreign funds and transferring their $1.9 billion in assets into their underlying funds, effective August 2. The move follows the elimination of the foreign content limit on registered plans.
In addition, CI intends to merge four RSP portfolios, with $460 million in assets, into their corresponding portfolios, as well as switch the underlying funds of six RSP funds within its CI Guaranteed Investment Fund program to the equivalent foreign funds.
As a preliminary step, CI will be closing the 36 RSP funds to new investors, effective the close of business on July 6, although investors with pre-authorized chequing plans in effect will be able to add to their investments under those plans.
By terminating the RSP funds, investors will become direct unitholders of the corresponding underlying fund. CI has already cancelled the forward agreements, which immediately reduced the expenses of the funds.
“The end of the foreign property limit and the RSP fund structure is a win for investors, as they have the opportunity to boost the diversification of their registered portfolios at a lower cost,” said Peter Anderson, president and CEO of CI Investments.
The termination of each RSP fund is considered to be a disposition by each unitholder of his or her units of the RSP fund at their current net asset value, which may trigger a gain or loss for tax purposes. However, as the RSP funds were designed for investment through registered plans and by other non-taxable investors, the change should not trigger any tax liability for investors.
For a complete list of the terminating funds please refer to the firm’s news release.
Concerning the RSP portfolios, each RSP portfolio and its corresponding fund now are effectively the same and each RSP portfolio will be merged into its corresponding fund.
CI Global Balanced RSP Portfolio will be merged with CI Global Balance Portfolio; CI Global Conservative RSP Portfolio with CI Global Conservative Portfolio; CI Global Growth RSP Portfolio with CI Global Growth Portfolio; and CI Global Maximum Growth RSP Portfolio with CI Global Maximum Growth Portfolio.
Investors in each RSP portfolio will exchange their units for units of their corresponding fund on a dollar-for-dollar basis. CI intends to complete each merger and wind up each RSP portfolio on or before September 3. On or prior to the effective date of a merger, CI will suspend purchases of units of the RSP portfolios. Investors will have the right to redeem units of the RSP portfolios up to the close of business on the effective date of the mergers. Following the mergers, pre-authorized chequing plans and automatic withdrawal plans that were established with respect to the RSP portfolios will be re-established in comparable plans with respect to the corresponding funds unless investors advise otherwise.
The mergers are subject to any necessary unitholder and regulatory approvals. Due to the similar nature of each RSP portfolio and its corresponding fund, CI is seeking permission from the Canadian securities regulators to effect the mergers without seeking unitholder approvals.
CI also will be switching the underlying funds of six RSP funds within its CI Guaranteed Investment Fund program, effective August 2. The CI GIFs will invest directly in the foreign mutual fund instead of its RSP version.
The new underlying funds are: CI Global Fund; CI Global Boomernomics Corporate Class; CI International Balanced Fund; BPI American Equity Fund; and BPI Global Equity Fund Synergy American Fund.
CI Investments terminating RSP funds
Fund manager to merge RSP portfolios, switch underlying funds in GIF program
- By: IE Staff
- July 5, 2005 July 5, 2005
- 12:15