ClaringtonFunds Inc. said today that it intends to terminate its four RSP Funds effective August 19.

The move to terminate follows from the granting of royal asset to federal legislation that eliminates foreign content restrictions in registered plans.

As a result, Clarington says the RSP Funds are no longer required to purchase forward contracts from financial institutions. The cost of these forward contracts caused the funds to have lower performance than their corresponding underlying funds.

Clarington says it will terminate the forward contracts immediately so that the RSP Funds will only hold units of the relevant underlying funds.

It adds that the termination of the forward contracts will remove a layer of costs of the RSP Funds. The investors in these funds will benefit from the cost savings.

The RSP Funds will terminate on August 19. Investors will receive units of the same series of the corresponding underlying funds having an equal value to their current investment. In preparation for the termination of the RSP Funds, sales of the funds will be suspended effective August 15, except for Clarington’s systematic plans.

“The changes to the foreign content rules open up new options for Canadian investors. Clarington is moving quickly to terminate the forward contracts and the RSP Funds to ensure that investors in these funds do not bear unnecessary costs. We encourage investors to talk to their financial advisors to evaluate the impact of these changes on their investment portfolio for their registered plans,” said Sal Tino, executive vp of Clarington.