TORONTO, March 31, 2014 — RBC Global Asset Management Inc. today announced that effective September 12, 2014, the following RBC Corporate Class Funds (the Funds) will be closed, subject to shareholder and regulatory approval:
RBC Capital Classes
RBC Select Classes
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.
The Funds were designed to include exposure to forward agreements as part of their investment strategies. Due to the change in tax treatment, RBC Global Asset Management Inc., the manager of the Funds, 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 which 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 termination of each Fund will be considered a taxable disposition. The affected Funds and their corresponding mutual fund trusts are listed in the table below:
|Terminating Funds||Corresponding Mutual Fund Trusts|
|RBC Bond Capital Class||RBC Bond Fund|
|Phillips, Hager & North Total Return Bond Capital Class||Phillips, Hager & North Total Return Bond Fund|
|RBC High Yield Bond Capital Class||RBC High Yield Bond Fund|
|RBC Select Very Conservative Class||RBC Select Very Conservative Portfolio|
|RBC Select Conservative Class||RBC Select Conservative Portfolio|
|RBC Select Balanced Class||RBC Select Balanced Portfolio|
|RBC Select Growth Class||RBC Select Growth Portfolio|
|RBC Select Aggressive Growth Class||RBC Select Aggressive Growth Portfolio|
The corresponding mutual fund trusts are not affected by the change in tax treatment because they do not use forward agreements.
RBC Global Asset Management Inc. will seek the required approval of mutual fund shareholders of the Funds for the proposed terminations at a special meeting to be held on or about Friday June 20, 2014, in Toronto, Ontario. Notice of the meeting, together with a management information circular for the meeting containing full details of the proposed terminations, will be mailed on or about Wednesday May 28, 2014, to mutual fund shareholders of record as of Friday May 9, 2014.
If the necessary approvals are received, the proposed terminations will take place on or about Friday September 12, 2014. Mutual fund shareholders will have a right to redeem mutual fund shares of the Funds up to the close of business on the business day immediately preceding the effective date of the proposed terminations.
The Independent Review Committee of the Funds considered and provided a positive recommendation for the proposed terminations after determining that the proposed terminations, if implemented, achieve a fair and reasonable result for each of the applicable Funds.
In conjunction with the proposed terminations, the corresponding RBC Underlying Funds and RBC Reference Funds will also be terminated on or about September 12, 2014.
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC), and includes institutional money managers BlueBay Asset Management and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to individual, high-net-worth and institutional investors through mutual funds, exchange-traded funds, hedge funds, pooled funds, separate accounts and specialty investment strategies. RBC GAM group of companies manage more than C$315 billion in assets and have approximately 1,200 employees located across Canada, the United States, Europe and Asia. In 2013, RBC GAM was recognized as the fastest growing asset manager over the last five years among the world’s top 50 asset managers, and named as having the second highest growth in assets under management over the last five years+.
RBC Global Asset Management is part of RBC Wealth Management, which is one of the world’s top 10 largest wealth managers*. RBC Wealth Management directly serves affluent, high-net-worth and ultra-high net worth clients in Canada, the United States, Latin America, Europe, the Middle East, Africa, and Asia with a full suite of banking, investment, trust and other wealth management solutions. The business also provides asset management products and services directly and through RBC and third party distributors to institutional and individual clients, through its RBC Global Asset Management business (which includes BlueBay Asset Management).
RBC Wealth Management has more than C$675 billion of assets under administration, more than C$411 billion of assets under management and over 4,400 financial consultants, advisors, private bankers, and trust officers. For more information, please visit rbcwealthmanagement.com.
+Pensions & Investments/Towers Watson global 500 ranking: World’s Largest Asset Managers 2013.
*Scorpio Partnership Global Private Banking KPI Benchmark 2013. In the United States, securities are offered through RBC Wealth Management, a division of RBC Capital Markets, LLC, a wholly owned subsidiary of Royal Bank of Canada. Member NYSE/FINRA/SIPC.