Invesco Canada examines federal budget tax proposal
TORONTO, March 28, 2013 /CNW/ - Invesco Canada Ltd. is currently reviewing a proposal in the 2013 federal budget that eliminates Character Conversion Transactions - investment strategies that deliver returns in the form of tax-preferred capital gains rather than fully taxable interest income through the use of forward contracts.
The proposal affects PowerShares Tactical Bond Capital Yield Class and Invesco Intactive Strategic Capital Yield Portfolio Class (the "Capital Yield Classes").
The budget proposal applies to any forward contracts with terms exceeding 180 days that are entered into on or after March 21, 2013, or any extension of existing forward contracts on or after March 21, 2013.
The existing forward contracts for PowerShares Tactical Bond Capital Yield Class and Invesco Intactive Strategic Capital Yield Portfolio Class expire in September 2015 and May 2017, respectively.
Under the present terms of the proposal, Invesco Canada believes current Capital Yield Class investors will continue to benefit from the capital gains treatment of returns until the expiry of the forward contracts, provided the forward contracts are not extended.
Invesco Canada is seeking greater certainty from the federal government on how the proposal will be implemented. As more information becomes available, we will determine the appropriate plan of action that puts clients in the best possible position.
Invesco Canada reserves the right to close the Capital Yield Classes to new purchases at any time and without notice, based on its assessment of how new purchases would affect the Capital Yield Classes.
Absent new purchases, changes to the budget proposals or guidance, Invesco Canada is confident investors in the Capital Yield Classes will receive the tax treatment as set forth in the prospectus for the period until expiry of the forward contracts.
To learn more about Invesco Canada's range of investment solutions, visit www.invesco.ca.
Commissions, trailing commissions, management fees and expenses may all be associated with mutual fund investments. Mutual funds are not guaranteed, their values change frequently and past performance may not be repeated. Please read the simplified prospectus before investing. Copies are available from your advisor or Invesco Canada Ltd.
About Invesco Canada Ltd.
Invesco Canada Ltd., operating under three distinct yet complementary product brands (Trimark, Invesco and PowerShares), is one of Canada's leading investment management companies. A subsidiary of Invesco Ltd., Invesco Canada's singular focus is on investment management, offering a diversified suite of solutions to institutions, organizations, companies and individual investors across Canada and around the world. Additional information is available at www.invesco.ca.
About Invesco Ltd.
Invesco Ltd. is a leading independent global investment management firm dedicated to helping investors worldwide achieve their financial objectives. By delivering the combined power of our distinctive investment management capabilities, Invesco provides a wide range of investment strategies and vehicles to our retail, institutional and high-net-worth clients around the world. Operating in more than 20 countries, the firm is listed on the New York Stock Exchange under the symbol IVZ. Additional information is available at www.invesco.com.
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© Invesco Canada Ltd., 2013
SOURCE Invesco Canada Ltd.