Toronto, October 12, 2022 — Russell Investments Canada Limited (“Russell Investments”) announced today that it will propose to securityholders of Russell Investments Focused US Equity Pool, Russell Investments Focused US Equity Class, Russell Investments Focused Global Equity Pool and Russell Investments Focused Global Equity Class (the “Funds”) to add tax management to their investment objectives.
Tax management is a trading strategy that may be used by a Fund to reduce the amount of distributions it pays each year, which is referred to as tax-managed appreciation. Tax management currently involves one or more of the following activities:
- Tax-loss harvesting: Security values may fluctuate over short periods of time while ideally trending upward over the long term. During these fluctuations, the Fund may sell a security that has a current market value below its cost for tax purposes, thereby creating a loss that can be used to offset gains elsewhere in the Fund’s portfolio, or at a future date, that otherwise would be paid as a distribution.
- Reducing offsetting trades: From time to time, one sub-adviser to the Fund may be selling a security at the same time that another sub-adviser to the Fund is purchasing the same security. If the security is sold at a gain, the Fund may be required to pay a distribution of that gain. If the security is sold at a loss, current tax rules may prevent the Fund from using that loss in the short-term to offset gains elsewhere in the Fund. The Fund may seek to identify upcoming offsetting trades and instead reallocate the security between the sub-advisers to avoid the sale of that security.
- Reducing portfolio turnover: A higher portfolio turnover makes it more likely that the Fund will realize a gain from its securities that it needs to pay as a distribution. The Fund may seek to reduce its portfolio turnover in order to postpone realizing those gains.
- Seeking tax-efficient equities: Equity securities that pay dividends generate income for the Fund that it may need to pay as a distribution. Where equally suitable for its portfolio, the Fund may select equities that pay less or no dividends so that gains are generated mainly when the Fund sells the security.
Tax management will be implemented by Russell Investments Implementation Services, LLC as one of the sub-advisers to each Fund.
“With more than 30 years of tax-managed investing experience in the U.S. and a decade in Australia, we’ve honed solutions that are well-designed to maximize investors’ after-tax returns,” said Brad Jung, president, Russell Investments Canada Limited and head of North America Advisor & Intermediary Solutions at Russell Investments. “We’re eager to share our tax-managed capabilities with Canadian investors to help them improve after-tax wealth and keep more of what they earn.”
Meetings of the securityholders of each Fund will be held on or about November 28, 2022, to approve the change to the investment objective of each Fund and, if approved for all Funds, will take effect on January 3, 2023, with related changes to each Fund’s investment strategies. The name of each Fund also will change as follows:
|Current Name||New Name|
|Russell Investments Focused US Equity Pool||Russell Investments Tax-Managed US Equity Pool|
|Russell Investments Focused US Equity Class||Russell Investments Tax-Managed US Equity Class|
|Russell Investments Focused Global Equity Pool||Russell Investments Tax-Managed Global Equity Pool|
|Russell Investments Focused Global Equity Class||Russell Investments Tax-Managed Global Equity Class|
About Russell Investments Canada Limited
Russell Investments Canada Limited is a wholly owned subsidiary of Russell Investments Group, Ltd. Established in 1985, Russell Investments Canada Limited has its head office in Toronto.
About Russell Investments
Russell Investments is a leading global investment solutions firm providing a wide range of investment capabilities to institutional investors, financial intermediaries, and individual investors around the world. Building on an 86-year legacy of continuous innovation to deliver exceptional value to clients, Russell Investments works every day to improve the financial security of its clients. The firm has C$385.9 billion in assets under management (as of 6/30/2022) for clients in 32 countries. Headquartered in Seattle, Washington, Russell Investments has offices in 18 cities around the world, including New York, London, Toronto, Tokyo, and Shanghai.
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