Fairway Advisors Inc. has filed a preliminary prospectus with for an initial public offering of units of Fairway Investment Grade Income Fund.
The fund is designed to provide investors with a stable income stream through the active management of a portfolio consisting primarily of investment grade corporate bonds and investment grade hybrid preferred securities of United States and Canadian issuers.
The fund’s investment objectives are to:
- provide unitholders with a stable stream of monthly distributions, with an indicative distribution for the first 12 months of 5¢ per units (60¢ per year to yield 6.0% on the subscription price of $10 per unit);
- mitigate the impact of significant interest rate increases on the value of the portfolio; and
- preserve and enhance the net asset value per fund unit.
Fairway says the initial allocation of the assets between corporate bonds and hybrid preferred securities is in expected to be 25% and 75%, respectively.
The assets will be managed by MFC Global Investment Management (Canada), the institutional investment arm of Manulife Financial Corp., and by John Hancock Advisers, LLC, an affiliate of MFC Global.
Fairway says the portfolio managers will employ a combination of interest rate risk management strategies intended to mitigate the impact of significant interest rate increases, while permitting it to benefit from declining interest rates.
Units will be available at $10 per unit with a minimum investment of $2,500, or 250 units. Fairway says units of the fund have received a rating of P-2f from Standard and Poor’s.
CIBC World Markets Inc. and TD Securities Inc. are co-lead agents for the fund along with a syndicate of investment dealers.