Toronto-based RBC Global Asset Management Inc. (RBC GAM) has closed three of its RBC Capital Class Funds in response to the federal government’s proposed changes to the tax treatment of income in certain funds.
The proposed changes, announced in the federal budget earlier this month, affects mutual funds that use what is known as a “character-conversion transaction” where derivatives are used to have ordinary income treated as capital gains.
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The three RBC Capital Class Funds include:
- RBC Bond Capital Class
- Phillips Hagar & North Total Return Bond Capital Class
- RBC High Yield Bond Capital Class
RBC GAM believes that to allow for an orderly transition the new rules will not apply to current investors in these funds and that they will continue to receive the same tax treatment for 180 days after March 21.
RBC GAM manages over $280 billion in assets and has roughly 1,000 employees in Canada, the U.S., Europe and Asia.