changes-ahead-announcement

Fidelity Investments Canada ULC has announced mergers and changes to the investment objectives of its capital yield funds.

Amendments to the Income Tax Act will eliminate the tax-related benefits associated with the character conversion transactions as of December 31, 2014. So, Fidelity cannot continue to manage these funds in the same tax-efficient way.

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The firm has received the appropriate regulatory permissions to conduct several mergers and make these changes without the approval of securityholders, subject to other approvals and conditions. In addition, the Independent Review Committee of the funds has approved the mergers. The capital yield funds were closed to new purchases on April 2, 2013.

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Here are the details of these changes.

After the close of business on January 16, 2015, the following funds will be merged into their corresponding reference funds which are existing Fidelity Investments mutual funds. On the effective date, securityholders will automatically cease to hold units of the terminating funds and will become securityholders in the continuing funds.

Terminating funds Continuing funds
Fidelity Canadian Bond Capital Yield Fund Fidelity Canadian Bond Fund
Fidelity Tactical Fixed Income Capital Yield Fund Fidelity Tactical Fixed Income Fund
Fidelity American High Yield Capital Yield Fund Fidelity American High Yield Fund
Fidelity U.S. Monthly Income Capital Yield Fund Fidelity U.S. Monthly Income Fund

Revised investment objectives

On December 23, 2014, the following funds will undergo changes to their investment objectives and names.

Existing fund name New fund name
Fidelity Corporate Bond Capital Yield Class Fidelity Corporate Bond Class
Fidelity Premium Fixed Income Capital Yield Private Pool Fidelity Premium Fixed Income Private Pool Class
Fidelity Premium Tactical Fixed Income Capital Yield Private Pool Fidelity Premium Tactical Fixed Income Private Pool

Full details will be outlined in a separate notice to securityholders that will be circulated at least 60 days before the effective date of these changes. No action is required by securityholders.

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Originally published on Advisor.ca

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