Franklin Templeton Investments has announced that it intends to merge three Templeton Canadian mutual funds into its Franklin Bissett Canadian fund series. The company says that this is part of an effort “to streamline its Canadian fund line-up”. The proposal will be voted on at special meetings of securityholders to be held on or around February 27, 2015 in Toronto.
The proposal is that:
- the Templeton Canadian Stock Fund be merged into the Franklin Bissett Canadian Equity Fund;
- the Templeton Canadian Stock Corporate Class be merged into the Franklin Bissett Canadian Equity Corporate Class; and
- the Templeton Canadian Balanced Fund be merged into the Franklin Bissett Canadian Balanced Fund.
Franklin Templeton notes that the Franklin Bissett Canadian Equity Corporate Class is part of its corporate class structure, which allows investors to switch between funds and portfolios while deferring any taxable dispositions until they withdraw their investments from the structure. The company also points out that all of the continuing mutual funds have better historical performance than the terminating funds, along with lower fees.
Investors will be able to either switch to a different fund or redeem their holdings in the terminating funds on or prior to the close of business on March 12, 2015. If the mergers are approved, Franklin Templeton says that any investors who still remain in the terminating funds will have their money transferred to the continuing fund at the close of business on March 13, 2015. Each of the proposed mergers will be executed on a tax-deferred basis.