Aston Hill VIP Income Fund (TSX – VIP.UN) continues to benefit from strong equity market returns, particularly in the U.S., as well as relatively attractive performance in the high-yield credit markets. The fund has maintained its maximum allowable exposure to high-yield bonds, which is 30 per cent of assets, and its maximum exposure to foreign investments, which is 10 per cent of assets. It has also increased its exposure to sectors or industries that stand to benefit from rising interest rates.
Aston Hill VIP Income’s investment objective is to achieve a high level of monthly distributions and the opportunity for capital appreciation by investing in a broadly diversified portfolio of income-producing securities, including dividend-paying equity and fixed-income securities.
The fund’s investment approach emphasizes high-quality securities, liquidity, capital preservation and broad diversification. Securities selection is based on fundamental “bottom-up” analysis and includes meeting with management.
Aston Hill VIP’s net asset value, or NAV, per unit was $10.31 as at December 31, 2013. That was up 11.2 per cent from $9.27 as at December 31, 2012. So far this year, NAV has risen 3.4 per cent to $10.66 a unit.
The fund’s current distribution per unit is $0.045 a month, or $0.54 a year. That’s down from the $0.77 that was paid in 2012, when management made the decision to reduce the distribution to a more sustainable range.
The units trade at a slight discount to their NAV of $10.66 a unit.
Aston Hill Income Fund is a buy if you want high income and some growth and you can tolerate medium investment risk. This income trust fund is regularly featured on the Money Reporter’s list of Best Income Trusts For You in its monthly Income Trust Guide. Securities on this list are recommended as the main building blocks of your income trust portfolio.
Money Reporter, MPL Communications Inc.
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