TORONTO, March 29, 2016 – The recently released 2016 Federal Budget includes a proposal to prevent the deferral of capital gains tax by investors in mutual fund corporations. The Federal Budget proposes to amend the Income Tax Act so that a switch between classes of shares of a mutual fund corporation will be considered to be a disposition at fair market value for tax purposes. The change will not apply to switches between different series of the same share class.
This proposal affects a number of mutual fund corporations across the industry, including the following RBC Corporate Class Funds (the Funds):
|RBC Corporate Class Funds|
|RBC Balanced Growth & Income Class||RBC U.S. Equity Value Class|
|RBC Canadian Dividend Class||RBC U.S. Mid-Cap Value Equity Class|
|RBC Canadian Equity Class||RBC U.S. Small-Cap Core Equity Class|
|RBC Canadian Equity Income Class||RBC $U.S. Short Term Income Class|
|RBC Canadian Mid-Cap Equity Class||RBC QUBE Low Volatility Canadian Equity Class|
|RBC European Equity Class||RBC QUBE Low Volatility Global Equity Class|
|RBC Emerging Markets Equity Class||RBC QUBE Low Volatility U.S. Equity Class|
|RBC Global Equity Class||PH&N Canadian Equity Value Class|
|RBC Global Resources Class||PH&N Monthly Income Class|
|RBC International Equity Class||PH&N Overseas Equity Class|
|RBC North American Value Class||PH&N U.S. Multi-Style All-Cap Equity Class|
|RBC Short Term Income Class||BlueBay Global Convertible Bond Class (Canada)|
|RBC U.S. Dividend Class||BlueBay $U.S. Global Convertible Bond Class (Canada)|
|RBC U.S. Equity Class|
The change is expected to take effect beginning on October 1, 2016. Until then, the Funds will continue to operate in the same manner as prior to the budget announcement. RBC Global Asset Management Inc. is awaiting further guidance from the Federal Government with respect to the implementation of the budget proposal.
Shareholders of the Funds may wish to speak with their financial advisor about their investment options.
About RBC Global Asset Management and RBC Wealth Management
RBC Global Asset Management (RBC GAM) is the asset management division of Royal Bank of Canada (RBC) and includes BlueBay Asset Management and Phillips, Hager & North Investment Management. RBC GAM is a provider of global investment management services and solutions to institutional, high-net-worth and individual investors through separate accounts, pooled funds, mutual funds, hedge funds, exchange-traded funds and specialty investment strategies. The RBC GAM group of companies manage more than $380 billion in assets and have approximately 1,300 employees located across Canada, the United States, Europe and Asia.