The firm has transformed a closed-end fund into an exchange-traded mutual fund
Following through on a previous announcement, Purpose Investments has converted its Purpose Floating Rate Income Fund from a closed-end fund to an exchange-traded mutual fund. It trades on the TSX.
The fund’s class A units will be renamed ETF units, and its class U units will be ETF non-currency hedged USD units. Furthermore, the trading symbol for class A units will be changed from FLOT.UN to FLOT. ETF non-currency hedged CAD units of the fund will also be introduced on the TSX under the symbol FLOT.B; other classes of mutual fund units will be made available for purchase under the fund’s prospectus.
According to Purpose, holders of FLOT.UN and FLOT.U should receive several benefits from the conversion. Those include:
- A reduced management fee (from 1.25% per annum to 0.85% per annum);
- Efficient trading and daily liquidity;
- Management of the fund by Neuberger Berman, a private, independent, employee-owned investment manager with deep experience and resources, as well as innovative investment solutions; and
- No resulting disposition of units for tax purposes
The Purpose Floating Rate Income Fund seeks to actively preserve capital in a rising-rate environment through investments in floating-rate securities. The fund invests in a diverse portfolio of senior bank loans, structured credit, short-duration bonds, and preferred shares.
Related stories:
Purpose converts income fund into open-end fund
Purpose launches new ETF series for investment-grade bond fund
