Dynamic Mutual Funds Ltd. announced Friday that it has filed a preliminary prospectus for an initial public offering of units of diversiTrust Stable Income Fund.
Dynamic said that the fund will allow investors to participate in returns on an actively managed and diversified portfolio of income trusts in four key sectors: business trusts, utility trusts, REITs, and resource trusts.
The fund seeks to provide conservative, tax-efficient income, at a targeted annual yield of approximately 7.50% (paid monthly, based on a $10 purchase price). To enhance total returns the fund may use leverage. The overall limit of such leverage and borrowing transactions will be restricted to 15% of total assets.
The principal managers of the fund are Ned Goodman and Oscar Belaiche. Both are co-lead portfolio managers of the diversiTrust Income Fund and the Dynamic Focus+ Diversified Income Trust Fund.
Dynamic said the fund has received a preliminary stability rating of SR-1 from Standard & Poor’s, S&P’s highest available rating for income trusts, based on the prospective composition of the fund’s portfolio of income securities, investment objectives, investment strategy and investment restrictions.
Units will be available at a cost of $10 per unit with a minimum investment of $1,000 (100 Units) through securities dealers across Canada.
Scotia Capital Inc., Dundee Securities Corp. are the co-lead agents of the issue. CIBC World Markets Inc., RBC Dominion Securities Inc., BMO Nesbitt Burns Inc., National Bank Financial Inc., TD Securities Inc., Canaccord Capital Corp., HSBC Securities (Canada) Inc., Raymond James Ltd., Bieber Securities Inc., and Wellington West Capital Inc. are agents for the fund.