Mackenzie Investments is winding up its corporate class
Today Mackenzie Investments announced that it will be winding up Mackenzie Financial Capital Corporation, including its suite of 34 Corporate Class funds, effective July 30, 2021.
This decision reflects changing market and regulatory environments, which have reduced the tax-efficiency benefits of corporate class structures in Canada. Mackenzie’s corporate class is in a taxable position and is expected to remain so. As such, we believe that winding up the structure is in the best interests of our investors.
About the changes
On July 30, 2021, we’ll merge 34 Corporate Class funds into their trust fund equivalent or “twin trust” where required. If no corresponding trust fund currently exists, a continuing fund will be launched to facilitate the merger.
Key highlights for all mergers:
Executed on a tax-deferred basis
Fees the same or lower for the continuing funds
Substantially the same investment objectives
Same portfolio management team and expertise
No action required or disruption for investors
A full list of the terminating funds can be found here.
Unitholder approval is not required for these mergers; instead, investors will receive 60 days notice of the pending merger(s).
Investors holding a terminating fund in a non-registered account will not realize any capital gains or losses as a result of the mergers, which are being executed on a tax-deferred basis. However, redemptions or switches out of a terminating fund prior to the merger date will trigger a taxable event for the investor.
Twin trusts
To protect the interests of investors who hold the continuing trust funds in non-registered accounts, Mackenzie may need to launch additional trust funds ("twin trusts") that will be used instead of the existing continuing funds. These twin trusts would be hard-capped immediately following the merger.
This means that PACs and purchases (including dealer-administered systematic plans) would be directed to the existing trust, while redemptions and SWPs would come from the twin trust.
If any twin trusts are required, we’ll provide you with more detailed fund information in the weeks before the mergers.
Systematic plans
Following the mergers, any Mackenzie-administered systematic plans on the terminating funds will carry over to the continuing fund. We’ll also be working with you to ensure that any dealer-administered systematic plans are moved to the appropriate continuing fund.
Key dates
May 7: Record date for the mergers (investors holding the fund as of this date)
May 21: Advisor mailing (letter to explain the changes and list of impacted investors)
May 27: Investor mailing (60 days notice of the pending mergers)
July 30: Expected merger date
Supporting you through these changes
Your Account Manager will be meeting with you to explain these changes in detail and answer any questions you may have.
We have also created an online portal to help advisors support their client conversations. You can visit www.mackenzieinvestments.com/corporate-class to find the following materials:
A full list of terminating funds
Advisor and investor-friendly support, education and insight pieces
Regulatory documents
Additional trust-to-trust merger
In September, 2021 we will also merge the Mackenzie Global Small-Mid Cap Equity Fund into the Mackenzie Global Small-Mid Cap Fund. This trust-to-trust merger will be executed separately from the corporate class wind-up.
Unitholder approval is not required for this merger, which is also being executed on a tax-deferred basis. Advisor and investor packages will be sent using the timelines noted above in the Key dates section.
Questions?
Your Dealer Relations Account Manager will be contacting you shortly to provide more detailed information about the changes, but if you have any questions in the meantime, please let us know. You can contact your Account Manager directly or otherwise send an email to drelations@mackenzieinvestments.com.
Thank you for your continued support of Mackenzie Investments.
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