Toronto-based Scotia Asset Management L.P. has made the decision to no longer accept additional investments in certain of its corporate class funds, effective April 12.

The March 21 federal budget included a proposal to eliminate certain tax benefits in mutual funds that use forward contracts to convert interest income to capital gains for tax purposes. The budget describes this structure as “character conversion transactions.”

The proposal affects Scotia Corporate Class Funds and Scotia Private Corporate Class Pools that employ these transactions as part of their investment strategies:

  • Scotia Conservative Government Bond Capital Yield Class
  • Scotia INNOVA Income Portfolio Class
  • Scotia Fixed Income Blend Class
  • Scotia Canadian Corporate Bond Capital Yield Class