Purpose Investments Comments on Impact of 2016 Federal Budget Proposals on Its Corporate Class Funds

Purpose Investments Inc. (“Purpose”) wishes to comment on the 2016 Federal Budget proposed changes to the Income Tax Act (Canada) (the “Proposal”) from March 22, 2016 that will prevent tax-deferred switching between shares of a mutual fund corporation. If adopted in its current form, the Proposal will become effective on October 1, 2016 and will treat a switch between mutual funds shares of the same mutual fund corporation as a disposition at fair market value for tax purposes resulting in a capital gains or losses for the investors.
The Proposal affects all mutual fund corporations in the industry and as such will affect an investor’s ability to compound wealth over the long term. In Purpose’s opinion this will likely result in some mutual fund manufacturers electing to abandon the corporate class structure altogether.
The Purpose corporate class funds will continue to benefit from consolidating expenses, income, gains and losses of multiple funds into a single entity to provide tax efficient outcomes for investors.
Investors should consult with their financial advisor about the potential implications of the proposed changes to their portfolios, tax situation and investment plans. Purpose will continues to monitor and assess the Proposal and any further updates and changes to it and the potential impact on the Purpose corporate class funds.
The list of Purpose corporate class funds affected by the proposed changes to Canadian tax law can be found in the table below:

Fund
Purpose Core Dividend Fund
Purpose Premium Yield Fund
Purpose Total Return Bond Fund
Purpose Best Ideas Fund
Purpose Tactical Hedged Equity Fund
Purpose International Tactical Hedged Equity Fund
Purpose Enhanced US Equity Fund
Purpose Diversified Real Asset Fund
Purpose Duration Hedged Real Estate Fund
Purpose Monthly Income Fund
Purpose Premium Money Market Fund

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