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Purpose Investments converts Global Financials Income Fund to open-end structure with ETF and MF units


Purpose Investments has converted the Purpose Global Financials Income Fund (PFG.UN) (formerly Australian Banc Income Fund) into an open-end fund with ETF units and mutual fund units.

The Class A units of PFG.UN were delisted from the Toronto Stock Exchange at the close of business on 3 July 2018 and the ETF units were listed on the Toronto Stock Exchange today under the ticker symbol PFG.
Unitholders of PFG.UN are not required to take any action in order to become unitholders of PFG. Each holder of Class A units of PFG.UN will automatically receive one ETF unit of PFG for each Class A unit of PFG.UN held and holders of non-trading Class F units of PFG.UN will automatically receive 1 Class F unit of Purpose Global Financials Income Fund for each Class F unit of PFG.UN held. New Class A units of the Fund will also be created for non-fee-based advisors.
Purpose says the conversion should provide unitholders of PFG.UN with several benefits, including a lower management fee and a lower expected management expense ratio. Effective 14 June, 2018, Purpose reduced the management fee on PFG to 0.55 per cent per annum, which is a reduction from the 1.05 per cent management fee of PFG.UN.
In addition, as an ETF is in continuous distribution, PFG’s ETF units are expected to trade efficiently and close to their net asset value and the units will be redeemable daily at net asset value, thereby significantly increasing liquidity for Class A unitholders of PFG.UN.
PFG will also pay distributions on a monthly basis, which Purpose says is an improvement over the current quarterly payment schedule of PFG.UN and will provide unitholders with more frequent distribution payments.
PFG’s investment objective has been broadened to expand the focus of PFG’s investments from common shares of Australian banks to investments in global financial services companies. This will provide investors with significant diversification benefits and attractive income from a portfolio focused on higher yielding stocks with strong underlying fundamental characteristics.
The conversion will not result in a disposition of units by holders of PFG.UN, and accordingly, any embedded gain will not be realized as a result of the conversion.

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