Mackenzie launches high-yield tax-efficient corporate bond fund

By Jennifer Chiou

New York, June 18 - Mackenzie Financial Corp. said it is introducing the Mackenzie Sentinel North American Corporate Bond Class fund in response to strong demand from investors for a tax-efficient corporate bond fund.

The fund is available for purchase on Friday.

Mackenzie said that the fund aims to provide investors with the returns of a high-yield fixed-income fund in a tax-efficient manner.

"Many investors today want to receive steady, reliable income from their investments, and corporate bond funds can comprise a component of such a portfolio. However, traditional corporate bond funds distribute interest income, which is fully taxable," Mackenzie president David Feather said in a news release.

"Mackenzie Sentinel North American Corporate Bond Class provides investors with the ability to receive tax-efficient monthly distributions."

As part of Mackenzie's Capitalcorp structure, the fund offers investors the ability to switch between the fund and more than 50 other Capitalcorp funds on a tax-deferred basis.

"This is a tremendous advantage for taxable investors, as they may not pay any taxes until they redeem out of the structure," Feather added in the release.

Series A of the fund is suitable for investors who are seeking exposure to the high-yield fixed-income class but do not require regular cash flow.

Series T6 securities are designed for investors looking for regular cash flows, as these securities provide monthly distributions at a rate of 6% per year, generally in the form of tax-efficient return of capital, Mackenzie said.

A registered version of the fund is also available.

The lead manager for both funds is Dan Bastasic, vice president of investments at Mackenzie.

Toronto-based Mackenzie is an investment management firm.

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