This decision has been made in response to the Federal Government’s budget announcement on March 21, 2013 which included proposed changes that eliminate certain tax advantages enjoyed by investment funds that employ what are described as "character conversion transactions" – the use of forward agreements to obtain capital gains treatment on returns that would otherwise be fully taxable as ordinary income. Such forward agreements are used by a number of investment funds across the country including the Manulife funds and pools listed below.
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Manulife Mutual Funds continues to assess the budget proposal and its potential impact. At this time, it is believed to be in the best interest of existing investors in the funds and pools noted below to suspend further purchases until there is greater guidance from the Federal Government regarding this proposal. Once all of the details are known, Manulife Mutual Funds will determine the best long-term course of action for these funds and pools.
Manulife Corporate Bond Class
Manulife Floating Rate Income Class
Manulife Strategic Balanced Yield Class
Manulife Strategic Income Class
Manulife Structured Bond Class
Manulife Yield Opportunities Class
Manulife Balanced Private Pool
Manulife Balanced Income Private Pool
Manulife Canadian Fixed Income Private Pool
Manulife Corporate Fixed Income Private Pool
Manulife Global Fixed Income Private Pool
Manulife Mutual Funds expects that the tax treatment of its funds that 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 in response to the budget proposal. During the 180-day transition period, existing investors are expected to continue to receive the same tax treatment they received prior to the budget announcement.
It is important to note that the fundamental benefits of corporate classes remain intact, including tax-deferred switching for investors, the ability of certain corporate classes to pay tax-efficient distributions of ordinary Canadian dividends and/or capital gains dividends, or the ability to potentially reduce or defer taxable distributions.
Investors are encouraged to speak with their financial advisor and/or tax advisor about their options regarding corporate class funds.
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