CI Global Asset Management Announces ETF Mergers

Rhea-AI Summary

CI Global Asset Management (CI GAM) has proposed the merger of six exchange-traded funds (ETFs) to streamline its product lineup and enhance operational efficiencies. These changes follow a recent proposal for 22 mutual fund mergers aimed at modernization. The mergers are expected to lower redemption risks and improve trading efficiencies by increasing asset bases. Special meetings for securityholders are set for March 15, 2022, with mergers potentially effective on or after April 8, 2022. CI GAM will absorb the associated costs, and management fees for the continuing ETFs will be lower.

Positive

• Proposed mergers aim to streamline ETF product lineup, enhancing operational efficiencies.
• Continuing funds will have larger asset bases, reducing redemption risks.
• Management fees for continuing ETFs will be lower, benefiting investors.

Negative

• Taxable disposition may occur for certain mergers held in non-registered accounts.

TORONTO--(BUSINESS WIRE)-- CI Global Asset Management (“CI GAM”) today announced a proposal to merge six exchange-traded funds into other ETFs as part of its continuing strategy to modernize its product lineup.

The changes, along with a proposal announced last month by CI GAM for 22 mutual fund mergers, will simplify and streamline CI GAM’s product lineup, making it easier for advisors and investors to do business with CI GAM.

The moves are part of CI GAM’s strategic priority of modernizing its asset management business, which this year has also included introducing a series of timely new investment products, the rebranding of over 150 investment funds, the integration of CI GAM’s in-house portfolio management boutiques into one global investment platform, and the appointment of a new Head of Investment Management.

CI GAM believes the mergers, listed below, will also benefit securityholders as the continuing funds will have larger asset bases, thereby lowering large redemption risk and increasing trading efficiencies, as applicable. All of the ETFs involved in the proposed mergers are listed on the Toronto Stock Exchange (“TSX”).

Terminating ETF	Ticker	Continuing ETF	Ticker
CI Active Canadian Dividend ETF (Common Units)	FDV	CI WisdomTree Canada Quality Dividend Growth Index ETF (Non-Hedged Units)	DGRC
CI Core Canadian Equity Income Class ETF (ETF Shares)	CSY
CI MSCI Canada Low Risk Weighted ETF (Common Units)	RWC
CI Active Credit ETF (Common Units)   CI Active Credit ETF (US$ Common Units)	FAO   FAO.U	CI Global High Yield Credit Private Pool (ETF C$ Series) CI Global High Yield Credit Private Pool (ETF US$ Hedged Series)	CGHY   CGHY.U
CI Active Utility & Infrastructure ETF (Common Units)	FAI	CI Global Infrastructure Private Pool (ETF C$ Series)	CINF
CI MSCI USA Low Risk Weighted ETF (Common Units) CI MSCI USA Low Risk Weighted ETF (Unhedged Common Units)	RWU   RWU.B	CI WisdomTree U.S. Quality Dividend Growth Index ETF (Hedged Units) CI WisdomTree U.S. Quality Dividend Growth Index ETF (Non-Hedged Units)	DGR   DGR.B

To facilitate the merger of CI Active Credit ETF into CI Global High Yield Credit Private Pool, CI GAM is launching ETF C$ Series and ETF US$ Hedged Series units of CI Global High Yield Credit Private Pool. These units will be listed on the Toronto Stock Exchange and commence trading under the ticker symbols CGHY and CGHY.U, respectively, on or about April 8, 2022.

The mergers require the approval of securityholders of the terminating ETFs, except for CI Active Utility & Infrastructure ETF (“FAI”). Special meetings of securityholders of the terminating ETFs will be held March 15, 2022 and securityholders will receive meeting materials in February 2022. Securityholders of FAI will be notified of the merger in February 2022.

If approved, the mergers will take place on or after April 8, 2022. This timeline allows for flexibility in tax planning by affected investors and their advisors, as the mergers involving CI MSCI Canada Low Risk Weighted ETF and CI Core Canadian Equity Income Class ETF will result in a taxable disposition if the ETFs are held in a non-registered account. The other mergers will be effected on a non-taxable basis.

The management and administration fees payable by investors in respect of the continuing ETFs are lower than those of the corresponding terminating ETFs. The costs and expenses associated with the mergers are being borne by CI GAM, not the ETFs.

The Independent Review Committee has reviewed the mergers with respect to conflict of interest issues and provided a positive recommendation (or approval in respect of FAI), having determined that the mergers would achieve a fair and reasonable result for each terminating ETF.

CI GAM also announced today that it will not be proceeding with the previously announced proposal to merge CI Corporate Bond Class into CI Corporate Bond Corporate Class. As a result, the special meeting of securityholders of CI Corporate Bond Class scheduled for March 14, 2022 will be cancelled.

About CI Global Asset Management
CI Global Asset Management 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 Global Asset Management is a subsidiary of CI Financial Corp. (TSX: CIX, NYSE: CIXX), an independent company offering global asset management and wealth management advisory services with approximately $331.8 billion in assets as of October 31, 2021.

Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund and exchange-traded fund (ETF) investments. Please read the prospectus before investing. 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 intended for informational purposes only and does not constitute an offer to sell or the solicitation of an offer to purchase mutual funds managed by CI Global Asset Management and is not, and should not be construed as, investment, tax, legal or accounting advice, and should not be relied upon in that regard. Every effort has been made to ensure that the material contained in this document is accurate at the time of publication. 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. These investments may not be suitable to the circumstances of an investor.

MSCI is a trademark of MSCI Inc. The MSCI indexes have been licensed for use for certain purposes by CI Global Asset Management (“CI GAM”) in connection with the CI ETFs (the “ETFs”). The ETF and the securities referred to herein are not sponsored, endorsed or promoted by MSCI Inc. or any of its affiliates (collectively, “MSCI”) and MSCI bears no liability with respect to any such fund or securities or any index on which such fund or securities are based. The ETF’s prospectus contains a more detailed description of the limited relationship MSCI has with CI GAM and any related funds.

“WisdomTree®” and “Variably Hedged®” are registered trademarks of WisdomTree Investments, Inc. and WisdomTree Investments, Inc. has patent applications pending on the methodology and operation of its indexes. The ETFs referring to such indexes (the “WT Licensee Products”) are not sponsored, endorsed, sold, or promoted by WisdomTree Investments, Inc., or its affiliates ("WisdomTree"). WisdomTree makes no representation or warranty, express or implied, and shall have no liability regarding the advisability, legality (including the accuracy or adequacy of descriptions and disclosures relating to the WT Licensee Products) or suitability of investing in or purchasing securities or other financial instruments or products generally, or of the WT Licensee Products in particular (including, without limitation, the failure of the WT Licensee Products to achieve their investment objectives) or regarding use of such indexes or any data included therein.

CI Global Asset Management is a registered business name of CI Investments Inc.

©CI Investments Inc. 2021. All rights reserved.

View source version on businesswire.com: https://www.businesswire.com/news/home/20211210005095/en/

Murray Oxby

Vice-President, Corporate Communications

416-681-3254

moxby@ci.com

Source: CI Global Asset Management

FAQ

What is the purpose of the ETF mergers proposed by CI Global Asset Management?

The ETF mergers aim to streamline CI GAM's product lineup, enhance operational efficiencies, and benefit investors by reducing redemption risks.

When will the special meetings for securityholders regarding the ETF mergers occur?

The special meetings for securityholders are scheduled for March 15, 2022.

What are the expected effects of the ETF mergers on investors?

Investors can expect lower management fees and larger asset bases for the continuing funds, enhancing trading efficiencies.

Will the mergers result in any tax implications for investors?

Yes, certain mergers will trigger a taxable disposition for ETFs held in non-registered accounts.

What is the timeline for the ETF mergers to take effect?

The mergers are anticipated to be effective on or after April 8, 2022.