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Analysis: This is primarily an income trusts fund (75.5% of total assets) with some bonds tossed into the mix (16.4% as of June 30/05). It has tended to underperform the Canadian Income Trusts category, in large part because of that bond position. Over the 12 months to July 31/05 it gained 20.1%, which was nine percentage points below the category average. The three-year average annual compound rate of return was 19% compared at an average of 20.3%. Risk is about average.
The major benefit is a high cash yield. The fund pays monthly distributions of 8c a unit (96c a year). At a recent net asset value of $13.07, that projects to a yield of 7.3% over the next year. Our annual survey of income funds, published in the April/05 issue of Mutual Funds Update, found very few that did better in calendar 2004.
For a group that is not very well known, this fund has done quite well in attracting investor interest. Since its launch in June 2002 it has accumulated $284 million in assets, a very respectable figure. The portfolio is handled by Glenn Paradis of Aegon Capital Management. We’ll give it a $$$ rating to start.