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Analysis: This is a relatively small fund with $88.6 million in assets under management but it has an excellent track record with above-average returns over all time periods from three months to five years. Over the 12 months to May 31/10 the fund had a strong gain of just under 10% compared to a category average of 6.7%. The five-year average annual compound rate of return was 4.2%. The portfolio is largely concentrated in corporate bonds (about 84% of assets) with federal issues accounting for almost 14%.
This fund will be of special interest to income-oriented investors. Distributions are paid monthly and are currently running at about 3c per unit. Over the year to May 31, investors received 54.83c per unit including a December 2009 capital gains distribution of 21.68c, for a cash yield of 5.44%. That’s very respectable for a bond fund. Because the majority of the payments are received as interest, the fund is best held in a registered account such as a RRIF for tax purposes.
The minimum initial investment is $1,000.