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US Persons Holding Non-US Mutual Funds

US citizens and lawful permanent residents (green card holders) who hold certain investments may unknowingly be subject to adverse US tax implications where the investments are characterized as investments in Passive Foreign Investment Companies (“PFICs”). PFICs include non-US mutual funds and exchange traded funds (ETFs) which are typically organized as corporations or trusts in Canada. The PFIC rules may also apply to other non-US entities, treated as corporations under US tax law, that earn significant amounts of investment income or whose assets are substantially passive in nature. For purposes of this test, cash and cash equivalents are considered passive because they have the potential of producing passive income (interest).

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