The prospective moves will leverage the strategic alliance with BlackRock and create a simplified ETF lineup
RBC Global Asset Management (RBC GAM) has announced a number of changes to RBC Index ETFs and RBC Index Funds, including proposed investment objective changes, mergers, and terminations. The announced changes reflect opportunities made available through the new strategic alliance between RBC GAM and BlackRock Canada.
“We are pleased to leverage the RBC iShares alliance for the benefit of investors, applying the expertise of the world's largest ETF and index manager to RBC Global Asset Management's line-up of index ETFs and index mutual funds,” said Doug Coulter, president of RBC GAM.
Changes to RBC ETFs
Subject to unitholder and regulatory approval, RBC GAM is proposing to merge the following RBC ETFs with iShares ETFs on or about April 5:
The proposed merger of RBC U.S. Equity Index ETF (RUSA) is expected to occur on a tax-deferred basis and therefore not be considered a disposition for tax purposes. The other four proposed mergers are expected to take place on a taxable basis, resulting in possible tax consequences for unitholders of the terminating RBC ETFs.
Also effective on or about April 5 and subject to unitholder and regulatory approval, BlackRock Canada will become the investment fund manager and portfolio advisor for the RBC Global Government Bond (CAD Hedged) Index ETF. On the same date, the RBC Emerging Markets Equity Index ETF will be terminated.
Changes to RBC Index Funds
RBC GAM is also proposing to change the investment objectives of the RBC Index Funds to enable them to invest in iShares ETFs. The RBC Index Funds include:
- RBC Canadian Government Bond Index Fund
- RBC Canadian Bond Index Fund
- RBC Canadian Index Fund
- RBC U.S. Index Fund
- RBC U.S. Index Currency Neutral Fund
- RBC International Index Currency Neutral Fund
The benchmarks for the funds will also be aligned to the respective iShares ETFs in which the fund will invest in or may invest in at a future date.
BlackRock Canada is also set to replace State Street Global Investors as the investment fund manager and portfolio advisor for the RBC Canadian Index Fund and the RBC U.S. Index Fund, subject to unitholder and regulatory approval, on or around April 9.
RBC will seek all required unitholder approvals for the changes at special meetings to be held on or about March 22 in Toronto.
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