TORONTO, Feb. 28, 2018 (GLOBE NEWSWIRE) -- (TSX:HIG.UN) (TSX:TLF.UN) Brompton Funds Limited (the “Manager”), the manager of each of Global Healthcare Income & Growth Fund (“HIG.UN”) and Tech Leaders Income Fund (“TLF.UN” and together, the “Funds”) is pleased to announce that at special meetings of unitholders held today, unitholders approved the conversion of each of the Funds (the “Conversions”) from closed-end investment funds into exchange-traded funds (each an “ETF”). HIG.UN unitholders voted 99.3% in favour, and TLF.UN unitholders voted 98.1% in favour of the Fund’s respective extraordinary resolutions.
On or about April 3, 2018, subject to regulatory approval, HIG.UN will become Global Healthcare Income & Growth ETF (new TSX ticker symbol: HIG) and TLF.UN will become Tech Leaders Income ETF (new TSX ticker symbol: TLF). Unitholders are not required to take any action for their TLF.UN or HIG.UN units to be converted to units of the applicable ETF on a 1:1 basis following the implementation of the Conversions.
The benefits of the Conversions are as follows:
- Increased Trading Liquidity: Both ETFs hold large capitalization, liquid equity securities and, when subject to the continuous distribution regime employed by exchange-traded funds, are expected to realize improved trading liquidity compared to the Fund’s current levels. Investors are expected to be able to buy or sell large blocks of units without substantially impacting the trading price of the ETFs.
- Reduced Bid/Ask Spreads: The market-making mechanism available to ETFs is expected to reduce bid-ask spreads from what is currently observed. This is beneficial as a reduced bid-ask spread is expected to result in a lower effective cost to buy or sell ETF units.
- Lower MER: TLF will end the practice of paying a service fee, which will lower the management expense ratio (the “MER”). Additionally, the Manager intends to waive each ETFs management fee or reimburse certain expenses to the ETFs, at the Manager’s discretion, to ensure the MER of each ETF is lowered to approximately 0.95% per annum.
- Potential for Lower Expenses per Unit due to Growth: As each of the ETFs will distribute units on a continuous basis, they will have the potential to increase the number of units outstanding through the issuance of new units, thereby spreading operating expenses across more units, resulting in reduced expenses per unit.
- No Change to Investment Strategy: The specific investment strategies of each ETF will remain substantially similar, both before and after the Conversions.
Additional details regarding the Conversions are available in the Funds’ joint management information circular dated January 29, 2018. Unitholders are reminded that if the Conversion of HIG.UN is completed prior to April 27, 2018, there will be no annual redemption provided to unitholders of HIG.UN.
About Brompton Funds
Brompton Funds, a division of Brompton Group which was founded in 2000, is an experienced investment fund manager with approximately $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 the Funds 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 net asset value when buying units of the Funds and may receive less than the current net asset value 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 Funds 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 Funds, to the future outlook of the Funds and anticipated events or results and may include statements regarding the future financial performance of the Funds. 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.