TORONTO: Sentry Select Capital Inc. (“Sentry Select” or the “Manager”) is pleased to announce that it will seek amendments to the existing investment objectives of Sentry Select Small Cap Income Fund (“Small Cap Fund”) and Sentry Select Lazard Global Infrastructure Fund (“Infrastructure Fund”) (collectively, the “Funds”). This announcement is in conjunction with the Special Meetings of Investors (the “Meetings”) that were held to seek securityholder approval for the mutual fund mergers (the “Mergers”) announced on January 21, 2010.
Current and proposed changes to the Investment Objectives of the Funds: Small Cap Fund is an open-end mutual fund with approximately $45.0 million in assets as at March 31, 2010. Small Cap Fund was recently awarded a 2010 Lipper Fund Award for the best risk-adjusted performance over three years in the Canadian small/mid-cap equity category. Small Cap Fund’s existing investment objective is to provide consistent monthly income and capital appreciation by investing primarily in small-capitalization income trusts, preferred securities, convertible debentures and, to a lesser extent, small-capitalization equities.
The proposed amendments to the investment objective of Small Cap Fund are necessary, in the view of the Manager, due to the impending changes in the tax treatment of Canadian income trusts, which are the current primary investment vehicle of Small Cap Fund. These tax changes, which are expected to become effective on January 1, 2011, will generally result in income trusts being taxed at a corporate rate. The Manager is concerned that as income trusts are expected to undergo, or have already completed, reorganizations or conversions to a corporate structure, investment opportunities for the Small Cap Fund will continue to decrease. This will inhibit the ability of Small Cap Fund to achieve its existing investment objective. Accordingly, it is proposed that Small Cap Fund’s investment objective be broadened to include other types of investments.
Infrastructure Fund is an open-end mutual fund with approximately $42.7 million in assets as at March 31, 2010. Infrastructure Fund’s investment objectives are to: (i) provide a total return for securityholders consisting of interest, dividend income and capital appreciation that outperform inflation, as measured by the Canadian Consumer Price Index (the “CPI”), by 5% per annum over rolling five year periods, and (ii) pay quarterly cash distributions (expected to be $0.125 per quarter, or 5% per annum based on the original price of $10.00 per security). To meet these investment objectives, the Infrastructure Fund invests in global infrastructure securities consisting of international companies with a direct or indirect investment in infrastructure.
The Manager proposes that the Infrastructure Fund amend its current investment objectives to allow for monthly distributions, rather than quarterly. It is also proposed that the link between the CPI and the current investment objectives of Infrastructure Fund be removed.
The Meetings are expected to be held on or about May 25, 2010. A Management Information Circular providing details of the amendments, as well as proxy voting forms, will be sent to those investors entitled to receive them in due course.
Sentry Select Capital Inc.: Sentry Select Capital Inc., the manager of the Funds, is a Canadian wealth management company that offers a diverse range of investment products including closed-end investment funds, mutual funds, principal-protected notes and flow-through limited partnerships, covering a variety of domestic and global mandates.
Certain statements included in this news release constitute forward-looking statements, including, but not limited to, those identified by the expressions "expect," "intend," "will" and similar expressions to the extent they relate to Sentry Select. The forward-looking statements are not historical facts but reflect the Sentry Select's current expectations regarding future results or events including, but not limited to, the proposed timing of the Meetings. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results or events to differ materially from current expectations. Although the Sentry Select believes that the assumptions inherent in the forward-looking statements are reasonable, forward-looking statements are not guarantees of future performance and, accordingly, readers are cautioned not to place undue reliance on such statements due to the inherent uncertainty therein. For a complete disclosure record of the Funds, please visit www.sedar.com.
Documents (including press releases) regarding the various investment funds that are managed or advised by Sentry are provided for information purposes only and cannot be relied on to be complete, exhaustive or error-free unless the complete set of documents for any given investment fund with respect to which information is being sought is reviewed and then only on SEDAR (www.sedar.com).