October 2, 2020
TORONTO (October 2, 2020) – CI Investments Inc. (“CI”) today announced that it is merging three exchange-traded funds (“ETFs”) into other investment funds with identical mandates. The mergers are part of CI’s ongoing initiative to streamline and modernize its fund lineup and will result in continuing funds with a dual-class structure that offers both mutual fund and ETF series.
The mergers will be effected at the close of business on or about January 15, 2021, and relate to the CI Liquid Alternatives™ fund offerings. Details are as follows:
No action is required by securityholders in the merging ETFs. The ticker symbols of each merging ETF will carry over to the ETF series of the continuing funds, and the fund codes for the mutual fund series will not change. For each merger, the investment objectives and the portfolio management team for the merging ETF and continuing investment fund are identical and will not change due to the merger.
The benefits of the dual-class structure, which CI introduced earlier this year, include reducing the duplication of funds, simplifying CI’s lineup, creating larger funds with greater economies of scale and portfolio diversification opportunities, and increasing the consistency of fund performance between different fund structures with the same mandates.
CI’s lineup of liquid alternative funds also includes CI Marret Alternative Enhanced Yield Fund, which was introduced in May 2020 with the dual-class structure that includes both ETF and mutual fund series.
Please note that the continuing funds pay fixed administration fees in exchange for CI bearing most operating expenses. The fixed administration fee charged to each continuing fund will be the same as or lower than the operating expenses currently being paid by the corresponding merging ETF. Fixed administration fees offer several benefits to investors, including greater predictability and transparency of the MER for each fund, as well as protection from potential increases in future operating expenses.
Following the mergers, securityholders of the merging ETFs will receive the equivalent dollar amount in units of the appropriate series of the continuing mutual fund. Common Units will be exchanged for ETF C$ Series units of the continuing fund, and US$ Common Units will be exchanged for ETF US$ Hedged Series units of the continuing fund. There will be no taxable disposition for securityholders as a result of the mergers, though the funds may pay a distribution at that time. The costs and expenses associated with the mergers are being borne by CI, not the funds.
The mergers will not require regulatory or securityholders’ approval. However, securityholders of the merging ETFs will be notified of the mergers in accordance with applicable securities laws.
CI has applied to list the ETF series units of the continuing funds on the Toronto Stock Exchange (the “TSX”). Listing of those ETF series units is subject to the approval of the TSX in accordance with its original listing requirements. The TSX has conditionally approved CI’s listing application and subject to satisfying the TSX’s original listing requirements, the ETF series units of the continuing funds will be listed on the TSX and investors will be able to buy or sell such units on the TSX through registered brokers and dealers in the province or territory where the investor resides.
The Independent Review Committee of the merging funds has reviewed the proposed mergers with respect to potential conflict of interest matters and provided its approval, having determined that the mergers achieve a fair and reasonable result for each of the funds.
More information about CI Liquid Alternatives can be found at www.ci.com/liquidalts.
About CI Investments
CI Investments is one of Canada’s largest investment management companies. It offers a wide range of investment products and services and is on the Web at www.ci.com. CI is a subsidiary of CI Financial Corp. (TSX: CIX), an independent company offering global asset management and wealth management advisory services with $189 billion in assets as of August 31, 2020.
Commissions, trailing commissions, management fees and expenses all may be associated with an investment in mutual funds and exchange-traded funds (ETFs). Please read the prospectus before investing. Important information about mutual funds and ETFs is contained in their respective prospectus. Mutual funds and ETFs are not guaranteed; their values change frequently and past performance may not be repeated. You will usually pay brokerage fees to your dealer if you purchase or sell units of an ETF on recognized Canadian exchanges. If the units are purchased or sold on these Canadian exchanges, investors may pay more than the current net asset value when buying units of the ETF and may receive less than the current net asset value when selling them.
This communication is provided as a general source of information and should not be considered personal, legal, accounting, tax or investment advice, or construed as an endorsement or recommendation of any entity or security discussed. Individuals should seek the advice of professionals, as appropriate, regarding any particular investment. Investors should consult their professional advisors prior to implementing any changes to their investment strategies.
The CI Funds are managed by CI Investments Inc., a subsidiary of CI Financial Corp., which is listed on the Toronto Stock Exchange under the symbol "CIX”.
CI Investments and the CI Investments design are registered trademarks of CI Investments Inc. CI Liquid Alternatives is a trademark of CI Investments Inc.
©CI Investments Inc. 2020. All rights reserved.
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