TORONTO, April 3, 2013 /CNW/ - The March 21, 2013 federal budget included measures that would eliminate certain tax benefits in investment funds that use forward contracts to convert income to capital gains for tax purposes. The budget describes this structure as "character conversion transactions."
Because the TD Private Bond Capital Yield Fund employs these transactions, TD Asset Management Inc. (TDAM) has made the decision to protect existing unitholders and no longer accept additional investments to this Fund as of the close of business Friday, April 5, 2013.
Although TDAM is seeking further clarification from the federal government regarding the budget measures, it appears that increasing the size of existing character conversion transactions is not permitted. For existing unitholders we believe there will be no change in tax treatment for a minimum of 180 days from March 21, 2013 and as a result of this change there is no reason to redeem their units.
About TD Asset Management Inc. TD Asset Management Inc. (TDAM) is a fully integrated North American investment manager, with CDN$211 billion in assets under management as of January 31, 2013. TDAM offers investment solutions to corporations, pension funds, endowments, foundations and high net worth individuals. A cornerstone of the success of TDAM's investment strategies has been the firm's disciplined and risk-controlled approach to investment, along with its ability to innovate progressive solutions that meet clients' changing needs and objectives.Under TD Private Funds, TDAM manages approximately CDN$8 billion in assets, as of February 28, 2013. TD Waterhouse Private Investment Counsel Inc. is one of Canada's largest private client money management firms. TD Waterhouse Private Investment Counsel's extensive network of professional portfolio managers provide discretionary investment management services to high net worth individuals and their families, small and mid-size corporations, charitable organizations and foundations, and executors and trustees from coast to coast. SOURCE TD Asset Management Inc.