TORONTO, April 2, 2013 /CNW/ - The recently released 2013 Federal Budget included a proposal to eliminate the tax benefits associated with forward agreements used by certain investment funds to achieve capital gains treatment on income that would otherwise be treated as ordinary income. This proposal affects a number of investment funds across the industry, including the following RBC Capital Class Funds (the Funds):
- RBC Bond Capital Class
- Phillips Hager & North Total Return Bond Capital Class
- RBC High Yield Bond Capital Class
RBC Global Asset Management Inc. expects that the tax treatment of the Funds, which were using forward contracts prior to the budget announcement on March 21, 2013, will remain unchanged for a period of at least 180 days from that date to allow for an orderly transition to the proposed new regulations.
During the 180-day transition period, the Funds will continue to operate in the same manner as prior to the budget announcement and existing investors will continue to receive the same tax treatment they received prior to the budget announcement. However, the Funds will be closed to new and additional investments effective immediately.
RBC Global Asset Management Inc. is awaiting further guidance from the Federal Government with respect to the implementation of the budget proposal and will continue to provide updates as further information becomes available.
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 institutional money managers BlueBay Asset Management, Phillips, Hager & North Investment Management and RBC Global Asset Management (U.S.). RBC GAM is a provider of global investment management services and solutions to individual, high-net-worth and institutional investors through exchange-traded funds, hedge funds, mutual funds, pooled funds, separate accounts and specialty investment strategies. RBC GAM group of companies manages more than C$280 billion in assets and has approximately 1,000 employees located across Canada, the United States, Europe and Asia.
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$593 billion of assets under administration, more than C$353 billion of assets under management and approximately 4,300 financial consultants, advisors, private bankers and trust officers.