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| Investment Objectives |
- To provide unitholders with a stable stream of tax advantaged semi-annual distributions targeted to be at least $0.25 every six months ($0.50 per year or 5.0% on the original issue price); and
- To return principal of $10.00 per unit on the termination date of December 31, 2012.
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| Investment Strategy |
Current Unit Price |
Investment Strategy:
In order to achieve its objectives, the Trust will provide the unitholder exposure to the Capital Repayment Portfolio and the Distribution Portfolio.
Capital Repayment Portfolio:
A portfolio composed of provincial and global bank bonds, structured to pay, at the termination date, $10.00 per unit.
Distribution Portfolio:
A portfolio consisting of debt securities issued by North American corporations and considered investment grade at the time of investment, structured to pay $0.25 every six months ($0.50 per year or 5.0% on the original issue price). |
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As
at March 5, 2010 |
Price |
$8.47 |
NAV |
$9.25 |
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| Investment Highlights |
Fund Details |
| Attractive Return |
Approximately 5.0% paid semi-annually, resulting in a pre-tax interest equivalent yield of 7.5%. |
| Tax Effective |
Each distribution will be treated as a return of capital and capital gain, which results in significantly greater after-tax income relative to an equivalently rated corporate bond. |
| Principal |
The Capital Repayment Portfolio: which is structured to return the principal of the Trust, is backed by the debt securities of Provinces of Canada and highly rated global financial institutions (blended rating of “AA-” by S&P). |
| Distributions |
The Distribution Portfolio: which is structured to pay the semi-annual distributions, invested strictly in investment grade debt securities of North American corporations. |
| Diversification |
The underlying portfolios consist of approximately 30-40 Provincial and corporate bonds and provide broad diversification across numerous Provinces and industry groups. |
| Monitoring |
The Investment Advisor will perform active risk monitoring of the portfolios. If a bond is downgraded below investment grade status, it will be evaluated and may be replaced with a higher quality instrument. |
| Liquidity |
Liquidity for the Units through TSX listing, Annual Redemption and Mandatory Market Purchase Program. |
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TSX symbol |
BND.UN |
Inception Date |
February 25, 2003 |
Distribution Per Unit |
$0.50 per annum |
Distribution Frequency |
Semi-Annually ($0.25 every six months) |
Termination Date |
December 31, 2012 |
Fund Size |
Approximately $75 million |
Eligibility |
Canadian content for RRSPs, RESPs, DPSPs, RIFFs |
Liquidity |
Units can be sold on the TSX as well as redeemed in December of each year |
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| Risk Profile of the Trust |
- The exposure to the Capital Repayment Portfolio, consists of Canadian Province and global financial institution strip bonds. It will increase from approximately 60% at inception to equal 100% of the original investment amount at Termination (blended rate of “AA-” by S&P).
- Conversely, the Distribution Portfolio invests in investment grade debt securities of North American corporations, so that the portfolio will decrease in size over time.
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