In response to amendments to the Income Tax Act (Canada) introduced in the 2013 Federal Budget, Toronto-based Fidelity Investments Canada ULC Tuesday announced mergers and changes to the investment objectives of its “capital yield” funds.
The amendments will eliminate the tax-related benefits associated with the character conversion transactions, currently used by capital yield funds, from December 31, 2014. Accordingly, Fidelity cannot continue to manage these funds in the same tax-efficient way from that date. As a result, the company has determined that it will be merging some funds and changing the investment objectives and names of the remaining funds.
Fidelity has received the appropriate regulatory permissions to conduct the mergers and make these investment objective changes without the approval of securityholders, subject to other approvals and conditions. In addition, the Independent Review Committee of the funds set out below has approved the mergers. The capital yield funds were generally closed to new purchases on April 2, 2013.
Mergers
After the close of business on Jan. 16, 2015, four funds will be merged into their corresponding reference funds, which are existing Fidelity mutual funds. No action is required by securityholders.
Terminating Funds |
Continuing Funds |
Fidelity Canadian Bond Capital Yield Fund |
Fidelity Canadian Bond Fund |
Fidelity Tactical Fixed Income Capital Yield Fund |
Fidelity Tactical Fixed Income Fund |
Fidelity American High Yield Capital Yield Fund |
Fidelity American High Yield Fund |
Fidelity U.S. Monthly Income Capital Yield Fund |
Fidelity U.S. Monthly Income Fund |
Revised investment objectives and names
On December 23, three funds will undergo changes to their investment objectives and names.
Existing Fund Name |
New Fund Name |
Fidelity Corporate Bond Capital Yield Class |
Fidelity Corporate Bond Class |
Fidelity Premium Fixed Income Capital Yield Private Pool |
Fidelity Premium Fixed Income Private Pool Class |
Fidelity Premium Tactical Fixed Income Capital Yield Private Pool |
Fidelity Premium Tactical Fixed Income Private Pool |
Full details of the investment objectives and name changes will be outlined in a separate notice to securityholders. No action is required by securityholders.