TORONTO, Nov. 30, 2018 (GLOBE NEWSWIRE) — (TSX: TOF.UN) Brompton Funds Limited (the “Manager”), the manager of Taylor North American Equity Opportunities Fund (the “Fund”) is pleased to announce that at a special meeting of unitholders held today (the “Meeting”), unitholders of the Fund approved an extraordinary resolution to merge (the “Merger”) the Fund with Brompton Global Dividend Growth ETF. The Merger is expected to take place on or about January 16, 2019, pending receipt of all necessary regulatory approvals.
The Manager believes that the Merger provides Unitholders with the following benefits:
- Exposure to Global Dividend Growth Equities and Monthly Income: Brompton Global Dividend Growth ETF invests in an actively managed portfolio composed of large capitalization global equities that have a history of or, in the Manager’s view, potential for dividend growth. Global dividend growth equities have historically outperformed the broader global equity market with lower volatility. Brompton Global Dividend Growth ETF currently has a monthly distribution of approximately 6.0% per annum.
- Lower Management Fee for Unitholders: The management fee rate for Brompton Global Dividend Growth ETF is 0.75% of the net assets, as compared to the Fund’s current management fee rate of 1.0% of the net assets of the Fund. Brompton Global Dividend Growth ETF does not pay a trailer fee or a performance fee, both of which are currently paid by the Fund.
- Lower Management Expense Ratio: The management expense ratio for units of Brompton Global Dividend Growth ETF (“ETF Units”) is expected to be a maximum of approximately 0.95%, which is approximately 1.63% lower than the units of the Fund (the “Units”).
- Increased Trading Liquidity: The ETF Units are listed for trading on the TSX under the symbol “BDIV”. As an exchange-traded fund, approved dealers acting as market makers for Brompton Global Dividend Growth ETF are able to offer or bid for large volumes of ETF Units on a stock exchange, as approved dealers have the ability to create or redeem ETF Units daily in large blocks directly from Brompton Global Dividend Growth ETF. This is expected to result in significantly improved liquidity relative to the current trading liquidity of the Units, allowing an investor to buy or sell large amounts of ETF Units without materially affecting the market price of Brompton Global Dividend Growth ETF.
- Better Trading Price Relative to NAV per Unit and Reduced Bid/Ask Spread: The Manager anticipates that an improvement in the trading price of the Units (relative to net asset value per Unit of the Fund) will provide a meaningful increase in value for Unitholders. As at October 12, 2018, prior to the announcement of the Meeting, the Fund had a 3.6% discount to net asset value. Market makers are able to price their bids and asks for ETF Units very tightly around their estimate of net asset value. It is expected that Brompton Global Dividend Growth ETF’s bid/ask spreads will be significantly reduced from the Fund’s bid/ask spread. This is beneficial to investors because a smaller bid/ask spread is expected to result in a lower effective cost to buy or sell ETF Units.
- The Merger is Expected to be Effected on a Tax-Deferred Basis: Subject to the assumptions and qualifications set out in the management information circular dated October 31, 2018, the Merger and issuance of ETF Units will not result in a taxable event to unitholders of the Fund.
- Costs and Expenses of the Merger: All costs of the Merger, including with respect to the Meeting, will be borne by the Manager and not by the Fund, Brompton Global Dividend Growth ETF or either of their respective unitholders.
Details regarding the Merger are available in the Fund’s management information circular dated October 31, 2018.
Unitholders are advised that the Fund’s distribution reinvestment plan will be terminated effective December 3, 2018 and the Fund’s December distribution will be paid in cash only.
The Fund will also offer an accelerated annual redemption on December 28, 2018, payable on January 15, 2019. Unitholders who wish to tender to the annual redemption must do so by 5:00 p.m. on December 14, 2018.
About Brompton Funds
Brompton Funds, a division of Brompton Group which was founded in 2000, is an experienced investment fund manager with over $2 billion in assets under management. Brompton’s investment solutions include TSX traded funds, mutual funds and flow-through limited partnerships. For further information, please contact your investment advisor, call Brompton’s investor relations line at 416-642-6000 (toll-free at 1-866-642-6001), email info@bromptongroup.com or visit our website at www.bromptongroup.com.
You will usually pay brokerage fees to your dealer if you purchase or sell units of an investment fund on the Toronto Stock Exchange or other alternative Canadian trading system (an “exchange”). If the units are purchased or sold on an exchange, investors may pay more than the current NAV when buying units of an investment fund and may receive less than the current NAV when selling them.
There are ongoing fees and expenses associated with owning units of an investment fund. An investment fund must prepare disclosure documents that contain key information about the Fund. You can find more detailed information about the Fund in the public filings available at www.sedar.com. Investment funds are not guaranteed, their values change frequently and past performance may not be repeated.
Certain statements contained in this news release constitute forward-looking information within the meaning of Canadian securities laws. Forward-looking information may relate to matters disclosed in this press release and to other matters identified in public filings relating to the Fund and Global Dividend Growth ETF, to the future outlook of the Fund and Global Dividend Growth ETF and anticipated events or results and may include statements regarding the future financial performance of the Fund and Global Dividend Growth ETF. In some cases, forward-looking information can be identified by terms such as “may”, “will”, “should”, “expect”, “plan”, “anticipate”, “believe”, “intend”, “estimate”, “predict”, “potential”, “continue” or other similar expressions concerning matters that are not historical facts. Actual results may vary from such forward-looking information. Investors should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and we assume no obligation to update or revise them to reflect new events or circumstances.