Toronto-based Invesco Canada Ltd. said Tuesday it is closing all series of PowerShares Tactical Bond Capital Yield Class and Invesco Intactive Strategic Capital Yield Portfolio Class to additional investments, effective close of business on June 14.
The capping of the Capital Yield Classes is in response to changes introduced in the 2013 federal dudget that eliminate the tax advantages of “character conversion transactions.”
Character conversion transactions are investment strategies that use forward contracts to deliver returns in the form of tax-preferred capital gains, rather than fully taxable interest income.
Invesco believes the capping of the Capital Yield Classes is in the best interests of investors in order to maintain the tax-efficient benefits of all classes within Invesco Corporate Class Inc.
Invesco says it may close the Capital Yield Classes to additional investments prior to June 14, should it determine this action is in the best interests of investors, and will notify the public of its decision to do so.
In light of these changes, subject to board approval, Invesco Canada will open the corresponding trust versions of the Capital Yield Classes — PowerShares Tactical Bond Fund and Invesco Intactive Strategic Yield Portfolio — for purchase in all account types, including non-registered accounts, effective June 17. (These funds are currently restricted to investors in registered tax plans.)
All other classes within Invesco Corporate Class Inc. remain unaffected as a result of the 2013 Federal Budget changes.
Invesco Canada Ltd. operates under three brands: Trimark; Invesco and PowerShares. It is a subsidiary of global investment management firm of Invesco Ltd.