A growing list of mutual fund companies say there is no immediate impact from the federal government's new rules for tax-advantaged mutual funds, but many are pre-emptively capping new investments this week.
The firms are grappling with Ottawa's proposal in the 2013 budget to close a loophole that allowed some investors to pay a lower tax rate by receiving some returns as capital gains, not income.
AGF Investments Inc. and Fidelity Investments Canada ULC were among the largest to state they would close new contributions to several funds on Tuesday.
Sentry Investments Inc. also said it would temporarily close two funds to new and additional purchases on April 5. First National Financial Corp. said its Mortgage Investment Fund wouldn't be affected until late 2017 and it "awaits further guidance from the Federal Government."
As Streetwise recently noted, the reaction amplifies the messages of other fund management firms last week. Excel Funds Management Inc. and Connor, Clark & Lunn Capital said their funds wouldn't feel any immediate impact.
(Jacqueline Nelson is a Globe and Mail Financial Services Reporter.)
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