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First Asset adopts new approach to ETF special distributions


First Asset Investment Management has announced special distributions in its First Asset exchange traded funds which include a 25% cash portion intended to assist unitholders in satisfying any potential tax liability. 

"Advisors have told us that the tax liability associated with the annual special distributions in an ETF can require the selling of assets to generate cash.  We are pleased to deliver the distributions in a manner that offers our investors a convenient and unique solution for this real-world investment need. Paying 25% of the special distribution in cash will cover most investors' potential tax liability,” says Rohit Mehta, Senior Vice President.
One-quarter of each Special Distribution will be paid in cash and the balance of each Special Distribution will be paid by the issuance of units of the applicable First Asset ETF, and immediately thereafter, the issued and outstanding capital of the First Asset ETF will be consolidated such that the number of issued and outstanding units of the First Asset ETF does not change.
The net asset value per unit of each First Asset ETF will decrease by an amount equal to the cash portion of the Special Distribution paid in respect of the First Asset ETF.  Investors holding their units outside registered plans will have taxable amounts to report and an increase in the adjusted cost base of their investment attributable to the portion of the Special Distribution paid in units. In all cases, the Special Distributions will be paid on or before 6 January, 2015, to unitholders of record on 30 December, 2014.  The ex-dividend date in each case is December 24, 2014.

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