CIBC AM offering corporate bond fund

CIBC Asset Management intends to offer the Renaissance Corporate Bond Fund as of August 26, 2013.

The fund invests in a portfolio of corporate bonds that have passed rigorous, internal credit analysis. And since November 2009, it has been the underlying reference fund for the Renaissance Corporate Bond Capital Yield Fund.

The bank is offering the new fund since, as of close of business August 23, 2013, it will cease to allow new purchases and switches into the Renaissance Corporate Bond Capital Yield Fund.

This move comes in response to proposed transitional rules for the character conversion transactions, which were announced in the 2013 Federal Budget and by the Department of Finance on July 11, 2013.

First, the budget proposed changes to eliminate character conversion transactions that use forward contracts to convert ordinary income to capital gains for tax purposes. Then the July 11, 2013 announcement proposed to extend the transition period in respect of forward agreements that were entered into before March 21, 2013 until the end of 2014.

Read: Government extends transition time for character conversions

Given the proposed extension, CIBC AM has determined it’s in the best interest of existing unit holders to cap the Renaissance Corporate Bond Capital Yield Fund at this time.

Read: How to deal with Budget 2013 tax proposals: Cestnick

Staff

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