Fidelity Investments Canada ULC announces fund mergers and changes to the investment objectives of its capital yield funds

TORONTO, Oct. 7, 2014 /CNW/ -  In response to amendments to the Income Tax Act (Canada) (the "Tax Act") introduced in the 2013 Federal Budget, Fidelity Investments Canada ULC ("Fidelity Investments") today announced mergers and changes to the investment objectives of its "capital yield" funds.   

The amendments to the Tax Act will eliminate the tax-related benefits associated with the character conversion transactions, currently used by capital yield funds, from December 31, 2014. Accordingly, Fidelity Investments cannot continue to manage these funds in the same tax-efficient way from that date. Therefore, Fidelity Investments has determined that it will be merging some funds and changing the investment objectives and names of the remaining funds.

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

The details of these changes are as follows:

Mergers

After the close of business on January 16, 2015 (the "effective date"), the following funds ("terminating funds") will be merged into their corresponding reference funds which are existing Fidelity Investments mutual funds ("continuing 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

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

Revised Investment Objectives and Names

On December 23, 2014, the following funds will undergo changes to their investment objectives and names as set out below:  

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 of the investment objectives and name changes 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.

About Fidelity Investments

Fidelity Investments Canada ULC is part of the Fidelity Investments organization of Boston, one of the world's largest providers of financial services. Recipient of the 2013 Morningstar Advisors' Choice Fund

Company of the Year, Fidelity Canada manages a total of $94 billion in mutual fund and institutional assets. This includes $19 billion in assets for institutional clients including public and corporate defined benefit pension plans, endowments, foundations and other corporate assets on behalf of clients across Canada as at September 30, 2014.

Fidelity Canada provides Canadian investors a full range of domestic, international and income oriented mutual funds, as well as asset allocation and managed solutions and the high net worth program, the Fidelity Private Investment Program. Fidelity Funds are available through a number of advice-based distribution channels including financial planners, investment dealers, banks, and insurance companies. Fidelity is a proud supporter of the Boys and Girls Clubs of Canada and we are dedicated to helping young Canadians realize their full potential as productive, responsible and caring citizens.

SOURCE: Fidelity Investments Canada Limited

Chris Pepper, Vice President, Corporate Affairs, Fidelity Investments Canada ULC, T: 416-307-5388, M: 416-795-7762, E: [email protected]