AGF Investments Announces Proposed Fund and ETF Terminations

AGF Investments, a prominent Canadian asset management firm, has recently announced its intention to terminate several of its funds and exchange-traded funds (ETFs) as part of a strategic effort to simplify and streamline its offerings. The decision, driven by factors such as the small number of investors, relatively low assets under management, and the costs associated with maintaining these products, aims to focus the company's resources on its core strengths and better serve its clients.

The terminated funds and ETFs include AGF Global Opportunities Bond ETF (AGLB), AGF Systematic Canadian Equity ETF (QCD), and AGF Systematic Emerging Markets Equity ETF (QEM). The last day of trading for these ETFs is expected to be May 28, 2024, with all units still held by securityholders being subject to a mandatory redemption as of the ETF Termination Date. Securityholders will be able to sell their units through the facilities of the applicable stock exchanges until the Delisting Date.

AGF Investments will also request to de-list the units of the AGF Investments ETFs from the Toronto Stock Exchange (TSX) and Cboe Canada Inc. at the close of business on or about May 28, 2024. Any remaining securityholders of an AGF Investments ETF as at the ETF Termination Date will receive the net proceeds from the liquidation of the assets of the AGF Investments ETF, less all liabilities and all expenses incurred in connection with the dissolution of the AGF Investments ETF, on a pro rata basis.

As a result of the proposed terminations, AGF Investments is also announcing today ad hoc distributions for AGF Systematic Canadian Equity ETF (QCD) and AGF Systematic Emerging Markets Equity ETF (QEM), which usually pay annual distributions. Unitholders of record on April 5, 2024 will receive cash distributions payable on April 11, 2024.

The terminations will impact AGF Investments' asset allocation and diversification strategies, as they will reduce exposure to specific asset classes and regions. To maintain a balanced portfolio for its clients, AGF Investments may need to rebalance their portfolios by adjusting the weights of remaining assets or introducing new investments. Additionally, the company should review clients' risk profiles and adjust their portfolios accordingly to ensure they continue to align with clients' investment objectives and risk tolerance.

Investors holding shares in the terminated funds and ETFs may face potential tax implications. To minimize the financial impact, investors can choose to sell their shares on NYSE Arca (for GLIF) or redeem their shares (for the other two funds) at any time prior to the Liquidation Date, subject to customary transaction fees or charges. Investors should consult with their financial advisor or tax professional to understand the potential tax consequences and determine the best course of action based on their individual circumstances.

In conclusion, AGF Investments' decision to terminate several funds and ETFs is part of a strategic effort to simplify and streamline its offerings, focusing on its core strengths and better serving its clients. The terminations will impact the company's asset allocation and diversification strategies, and investors should be aware of the potential tax implications. By taking proactive steps, such as rebalancing portfolios and consulting with financial advisors, AGF Investments and its clients can navigate these changes effectively and maintain a balanced, diversified portfolio.