Toronto-based Aston Hill Asset Management Inc. Wednesday announced the launch of a new fund called Aston Hill Strategic Yield II Fund (SY II Fund).
SY II Fund was created to provide a new option for investors looking to access the high yield portfolio managed by Sandy Liang after Aston Hill Strategic Yield Fund (SY Fund) was closed for new purchases earlier this year as a result of the Federal Budget changes announced in March.
The budget ended the use of a forward purchase or sale agreement if entered into or extended on or after March 21. Forward agreements have been used by investment funds to obtain exposure to a reference portfolio or asset on a more tax-efficient basis than directly holding the reference portfolio or asset. SY Fund currently has in place a forward agreement that provides exposure to the investment returns of Aston Hill Strategic Yield Trust (SY Trust).
SY II Fund has the same investment objective as SY Fund. Similarly to SY Fund, SY II Fund’s investment strategy is to obtain exposure to SY Trust by investing directly in units of SY Trust, but without the use of a forward agreement.
As both SY Fund and SY II Fund seek to achieve their objective by obtaining exposure to SY Trust, the Aston hill expects the returns for these two funds to be similar; however, it is important to note that future returns will not be identical as there are different fees and expenses associated with each fund, in particular the cost of the forward agreement used by SY Fund.
“Mr. Liang has done an impressive job generating low volatility returns for current investors and, as a result, the Strategic Yield strategy continues to garner significant interest. We are pleased to have launched Aston Hill Strategic Yield II Fund in order to continue to provide investors with access to Mr. Liang’s portfolio management expertise,” said Michael J. Killeen, president of Aston Hill Asset Management Inc.
Aston Hill a wholly owned subsidiary of Aston Hill Financial Inc. (TSX:AHF).