BlackRock Asset Management has announced special capital gains distributions for the 2013 tax year for the iShares Advantaged Canadian Bond Index Fund (CAB) and the iShares Global Monthly Advantaged Dividend Index Fund (CYH).
The distributions are as follows –
iShares Advantaged Canadian Bond Index Fund
iShares Global Monthly Advantaged Dividend Index Fund
These are special capital gains distributions, which will be paid in the form of reinvested distributions. Reinvested distributions will be automatically reinvested in additional units of the respective funds rather than paid in cash, and do not include ongoing monthly, quarterly, or semi-annual cash distribution amounts or any additional capital gains distributions. The additional units will be immediately consolidated with the previously outstanding units such that the number of outstanding units following the distribution will equal the number of units outstanding prior to the distribution.
The ex-dividend date for the special capital gains distributions will be 26 November 2013. The record date for the special capital gains distributions will be 28 November 2013, payable on 3 December 2013. The actual taxable amounts of these reinvested special distributions will be reported to brokers (through CDS Clearing and Depository Services) in early 2014.
On 17 September 2013, BlackRock Canada announced changes to seven forward-using iShares funds, including CAB and CYH, in response to proposed new federal taxation rules that would deem gains on the settlement of certain forward agreements to be included in ordinary income rather than treated as capital gains. Each of CAB and CYH obtains exposure to a reference portfolio through a forward agreement. In connection with the changes made to CAB and CYH, their respective forward agreements were terminated in the fourth quarter of 2013. Each of CYH and CAB experienced significant capital gains in 2013 due primarily to the appreciation in value of its reference portfolio that was realised upon the termination of its forward agreement.