The final annual special distributions for the First Asset exchange traded funds – uniquely in the ETF industry – include a 25% cash portion intended to assist unitholders in satisfying potential tax liability.
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. Traditionally, special distributions are paid by Canadian ETFs entirely through the distribution of units, which can create tax liabilities for investors in non-registered accounts. In response to concerns voiced by the advisor community on behalf of clients, we introduced this change to the composition of our Special Distributions in order to address the immediate cash needs in respect of these tax liabilities.
With respect to the portion of each Special Distribution paid by the issuance of units, as is standard in the industry, immediately after the issuance of the units, 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.