Effective June 1, AIC Ltd. will waive a portion of the management fee on the AIC Preferred Income Fund in order to increase the yield for investors, AIC said Monday.

The move comes in response to the unusually low interest rate environment in Canada and the United States, AIC says.

“We’ve received a great deal of positive feedback on the new AIC Preferred Income Fund since its launch last month and we’re confident that implementing this change to the fund’s management fee will serve to make an already great concept even better,” says Jonathan Wellum, AIC’s CEO and chief investment officer.

“AIC Preferred Income Fund is focused on reducing risk and volatility while also generating a predictable income stream. For this reason, many advisors see the fund as an ideal solution to help investors ease their way back into the markets,” Wellum adds.

The fund invests primarily in preferred shares of Canadian companies. “Preferred shares are generally safer than common shares because they rank higher up the capital structure,” says Wellum. “Now, more than ever, is the time to tap into the opportunity that these issues provide.”

The fund is managed by Randy LeClair, AIC senior vice president and portfolio,Manager, who has decades of experience in the fixed income space. LeClair, who also manages the AIC Global Bond Fund, received a Canadian Investment Award in 2008.

The waiver will reduce the management fee for mutual fund units of the fund to 1.75% from 2.00%. For Class F units, the fee will drop to 0.75% from 1.00%.

On some units of the AIC Preferred Income Fund, AIC pays dealers trailer fees from the management fees collected. The trailer fees will also be proportionately reduced on a temporary basis.

AIC says it will continue to monitor this situation closely. It may in its discretion at any time and without prior notice increase the fund’s annual management fee to its previous level or make further reductions. Trailer fees will be adjusted in accordance with any future changes to the annual management fee.

IE