(January 19 – 10:00 ET) – The Toronto 35 Index Participation Fund and the TSE 100 Index Participation Fund will be mereged with the iUnits S&P/TSE 60 Index Participation Fund, which is managed by Barclays Global Investors Canada Ltd.

The mergers are subject unitholder and regulatory approval. Unitholders will consider the proposals at a February 28 meeting. Assuming the approvals come through the TSE expects the mergers to be complete by March 6. On the closing date the assets of TIPS 35 and 100 will be exchanged at market value for i60s. The deal will be executed on a tax-deferred rollover basis, not triggering any immediate capital gains.

The i60s invest in the stocks of the S&P/TSE 60 Index, while the TIPS 35 tracks the TSE 35 index and the TIPS 100 tracks the TSE 100. The deal is designed to concentrate liquidity around one product, rather than diffusing it across three that are essentially designed to do the same thing. Once the deal has closed the i60s portfolio will be rebalanced, which may generate some capital gains.

Richard Carleton, vice president index and market data services at the TSE, says, “In our view, the S&P/TSE 60 Index provides the Canadian market with a single index which combines the liquidity associated with the Toronto 35 Index with the market representation of the TSE 100 Index. It offers a better market capitalization proxy than either the Toronto 35 Index or the TSE 100 Index. The S&P/TSE 60 Index is also the Canadian component of the S&P Global 1200 Index, and we believe that this will raise the profile of Canadian companies in international investment portfolios.”

As of December 31, 2000 the S&P/TSE 60 Index will replace both the TSE 35 and the TSE 100, and derivatives on both indicies ceased trading at the end of 1999.

Carleton says, “We are very pleased at this time to present this merger opportunity to unitholders of the TIPS 35 and TIPS 100 Funds. Unitholders will be able, on a straightforward basis, to convert their holdings to iUnits S&P/TSE 60s (i60s). They will then be able to participate on an ongoing basis in the performance of the S&P/TSE 60 Index and benefit from what we believe will be increased market liquidity.”
-IE Staff