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Analysis: This fund invests in high-yield bonds from around the world, including emerging markets – in fact 16.5% of the portfolio is held in emerging markets debt. The fund has been an above-average performer over the past three years with an average annual gain of 5.6% compared to 3.9% for the High-Yield Bond category (to June 30/07). Distributions are paid monthly and recently have been slightly more than 2c per unit, down from last year. Over the 12 months to July 31, the fund paid out a total of 29.16c per unit for a cash yield of 4.7%. That was really the only return investors received in that period as the net asset value was virtually unchanged year-over-year. Although the historic record is good, we advise some caution now due to concerns in the credit market. Only 37% of the bonds in the portfolio are rated A or better by the credit agencies, so there is some potential risk here, even though we have not seen it show up in the returns thus far. In fact, the fund has never has a losing 12-month stretch since its launch in 1994.