RBC Global Asset Management Inc. Monday to close several RBC Corporate Class Funds effective September 12.
The funds to be closed are: RBC Bond Capital Class; Phillips, Hager & North Total Return Bond Capital Class; RBC High Yield Bond Capital Class; RBC Select Very Conservative Class; RBC Select Conservative Class; RBC Select Balanced Class; RBC Select Growth Class; and RBC Select Aggressive Growth Class.
The funds will be closed to address changes announced in the 2013 federal Budget that included provisions to eliminate the tax benefits associated with forward agreements used by certain investment funds to achieve capital gains treatment on investment returns that would otherwise be treated as income for tax purposes, RBC GAM says.
Due to the change in tax treatment, RBC GAM has proposed that it is in the best interests of mutual fund shareholders to close the funds.
Under the proposed terminations, mutual fund shareholders of each fund will receive units in the same series of a corresponding mutual fund trust that has an investment objective consistent with that of the fund. Mutual fund shareholders of each fund will receive units of a mutual fund trust with a value equal to the value of their mutual fund shares of a fund.
The mutual fund trusts are not affected by the change in tax treatment because they do not use forward agreements.
The proposed changes must be approved by mutual fund shareholders, and a special meeting is planned for June 20.
If the necessary approvals are received, the proposed terminations will take place on September 12.