Toronto, August 15, 2016 - First Asset Investment Management Inc. ("First Asset"), the manager of Preferred Share Investment Trust (the "Fund") (TSX: PSF.UN), announces that, subject to receipt of any required regulatory approvals, the Fund will merge into First Asset Preferred Share ETF. First Asset currently anticipates that the merger will be implemented in October, 2016.
About First Asset Preferred Share ETF
First Asset Preferred Share ETF (the "ETF") is an exchange-traded fund that is managed by the Manager. The ETF's units trade on the Toronto Stock Exchange under the ticker symbol FPR.
The ETF and the Fund have substantially similar fundamental investment objectives. The ETF's investment objective is to provide unitholders with: (a) regular distributions; and (b) the opportunity for capital appreciation from the performance of a portfolio comprised primarily of preferred shares of North American issuers. The ETF's portfolio is managed by Signature Global Asset Management, a division of CI Investments Inc. and an affiliate of the Manager ("Signature").
Unitholders of the Fund may obtain additional information about First Asset Preferred Share ETF on SEDAR at www.sedar.com, at www.firstasset.com or by contacting First Asset.
About the Merger
Subject to receipt of the required approvals, First Asset will merge the Fund into the ETF in reliance on the Fund's pre-approved merger provisions. Unitholders will not be required to take any action in connection with the merger. After the merger, the former unitholders of the Fund will become unitholders of the ETF.
First Asset believes Unitholders of the Fund will benefit from the merger for the following primary reasons:
- Greater Market Liquidity and Efficient Trading - The ETF offers intra-day market liquidity for its units, but with the added benefit of posted two-way markets as a result of the market-making function provided by designated brokers. Accordingly, ETF Units can be expected to trade at a market price approximately equal to their intrinsic net asset value;
- Lower Management Fee - The annual management fee payable by the ETF to First Asset is 0.65% of net asset value of the ETF Units, exclusive of applicable taxes. This fee is lower than the 2.1% annual management fee currently paid by the Fund; and
- Potential Benefit from Economies of Scale - Following the merger, Unitholders of the Fund will become holders of the ETF, which, because of the continuous offering of its units, will have the opportunity to increase its asset base, thereby providing it with the potential to achieve the benefits of economies of scale by spreading its operating costs over more units.
First Asset will mail a notice to all of the Fund's unitholders at least sixty (60) days prior to the effective date of the merger.
Unitholders of the Fund who do not wish to continue holding units of the ETF after the merger have an opportunity to redeem their units in advance of the merger by tendering their units for redemption to the Fund's 2016 annual redemption right. Unitholders who wish to exercise the redemption must give notice prior to 5 p.m. (Toronto time) on September 15, 2016. Such Unitholders need to inform their advisor or other intermediary sufficiently in advance of September 15, 2016 of their desire to redeem their units as their advisor or other intermediary may have an earlier cut-off deadline.
About Signature Global Asset Management
Signature Global Asset Management manages core equity, balanced and income-oriented funds, and is CI Investments Inc.'s largest in-house portfolio management group. John Shaw, Vice-President, Portfolio Management and Portfolio Manager, is the lead portfolio manager for the ETF. Mr. Shaw leads the Investment Grade Bond Sector team for Signature Global Asset Management and has managed Signature's preferred share portfolio for over 10 years. Mr. Shaw has experience in international credit analysis, trading and portfolio management. Mr. Shaw holds a BA in Economics from Queen’s University and the Chartered Financial Analyst designation.
For further information, please call Investor Relations, First Asset at 416-642-1289 or 1-877-642-1289 or visit www.firstasset.com.
This press release contains forward-looking statements and information within the meaning of applicable securities legislation. Forward-looking statements can be identified by the expressions "seeks", "expects", "believes", "anticipates", "estimates", "will", "target" and similar expressions. The forward-looking statements are not historical facts but reflect the current expectations of First Asset regarding future results or events and are based on information currently available to it. Certain material factors and assumptions were applied in providing these forward-looking statements. All forward-looking statements in this press release are qualified by these cautionary statements. First Asset believes that the expectations reflected in forward-looking statements are based upon reasonable assumptions; however, First Asset can give no assurance that the actual results or developments will be realized. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Readers, therefore, should not place undue reliance on any such forward-looking statements. Further, a forward-looking statement speaks only as of the date on which such statement is made. First Asset undertakes no obligation to publicly update any such statement or to reflect new information or the occurrence of future events or circumstances except as required by securities laws. These forward-looking statements are made as of the date of this press release.
TMFirst Asset and its logo are trademarks of First Asset Capital Corp., a wholly-owned subsidiary of CI Financial Corp. which is listed on the Toronto Stock Exchange under the symbol "CIX". ®CI FINANCIAL is a registered trademark of CI Investments Inc., used under license.
Not for dissemination to U.S. Newswire Services or for dissemination in the United States of America.