Impact of the Federal Budget on Aston Hill Funds Currently Utilizing Forward Agreements

TORONTO, April 3, 2013 /CNW/ -

Federal Budget

On March 21, 2013, the Minister of Finance announced proposals in a Federal Budget that would treat the gain realized by an investment fund under a forward purchase or sale agreement (a "Forward Agreement") as ordinary income rather than a capital gain if the Forward Agreement was entered into or extended on or after March 21, 2013.  Officials at the Department of Finance subsequently advised that the proposals also are intended to apply to any change on or after March 21, 2013 to a pre-existing Forward Agreement which increases the market exposure under the Forward Agreement (often referred to as an "upsize").  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.

Aston Hill Strategic Yield Funds

Aston Hill Asset Management Inc. (the "Manager") is the manager of Aston Hill Strategic Yield Fund and Aston Hill Strategic Yield Class (the "Strategic Yield Funds").  Aston Hill Strategic Yield Fund currently has in place a Forward Agreement which provides exposure to the investment returns of Aston Hill Strategic Yield Trust.  Such Forward Agreement was entered into prior to the date of the Budget and will end in accordance with its terms on December 9, 2014.  Aston Hill Strategic Yield Class currently invests substantially all of its assets in units of Aston Hill Strategic Yield Fund.  The Manager has determined that the Budget proposals will have no impact on the Forward Agreement of Aston Hill Strategic Yield Fund and that current investors will continue to receive the benefits of the tax efficiencies of the Strategic Yield Funds until the Forward Agreement expires.  Based on available information, as the Budget proposals will not permit this Forward Agreement to be upsized, the Manager has determined that it would be in the best interests of existing investors to immediately cease accepting orders for the purchase of new units or shares of the Strategic Yield Funds until further notice.  This includes purchases under pre-authorized purchase plans.  Automatic reinvestments of dividends and distributions by the Strategic Yield Funds will continue until further notice.

Aston Hill Strategic Yield II Class

In order to provide investors with a new option for obtaining exposure to Aston Hill Strategic Yield Trust, the Manager announced that it has completed a reorganization of Aston Hill Money Market Class (now called Aston Hill Strategic Yield II Class) which now has substantially the same investment objective as Aston Hill Strategic Yield Trust and, as its current strategy, will invest its assets in units of Aston Hill Strategic Yield Trust.  Shares of Aston Hill Strategic Yield II Class offer the advantages of tax-deferred switching with other Aston Hill corporate mutual funds and are eligible investments for registered plans.  Shares of Aston Hill Strategic Yield II Class will be available for purchase as soon as a receipt is issued for the prospectus amendment being filed immediately.

"Mr. Sandy Liang has done an impressive job generating low volatility returns for current investors and, as a result, the Strategic Yield Funds have garnered significant interest. We look forward to continuing to provide investors with access to Mr. Liang's portfolio management expertise through Aston Hill Strategic Yield II Class," said Michael J. Killeen, President of Aston Hill Asset Management Inc. "Aston Hill currently is managing approximately $2 billion in high yield corporate debt assets and I look forward to continuing being able to provide investors with access to this market," said Mr. Liang.

Aston Hill Closed-End Funds

The Manager also is the manager of several closed-end funds (the "Closed-End Funds") which currently utilize Forward Agreements as part of their investment strategies.  These Closed-End Funds and the expiry dates of their respective Forward Agreements are summarized below:

Name of Closed-End Fund TSX Symbol Expiry Date of
Forward Agreement

Aston Hill Advantage Bond Fund MBB.UN April 30, 2029
Aston Hill Advantage Oil & Gas Income Fund AOG.UN June 29, 2028
Aston Hill Advantage VIP Income Fund AV.UN June 29, 2028

The Manager has concluded that the Closed-End Funds will be unaffected by the Budget proposals and investors in the Closed-End Funds will continue to receive the benefits of their tax-efficient investment strategies until their respective Forward Agreements expire.

Portfolio Advisor Update

Mr. Alexander (Sandy) Liang, formerly a Vice President and Portfolio Manager at the Manager, has become the President of a newly-formed portfolio management affiliate of the Manager called AHF Capital Partners Inc. ("Capital Partners").  Mr. Liang, through Capital Partners, continues to be the lead portfolio manager for the Strategic Yield Funds and Aston Hill Strategic Yield Trust, and has become the lead portfolio manager of Aston Hill Strategic Yield II Class.

About Aston Hill

The Manager is a wholly-owned subsidiary of Aston Hill Financial Inc. (TSX: AHF). Aston Hill Financial Inc. is a diversified asset management company with a suite of retail mutual funds, closed end funds, private equity funds, hedge funds and segregated institutional funds. Aston Hill Financial is also engaged in the administration of Argent Energy Trust (TSX: AET.UN). Aston Hill Financial has offices in Calgary, Toronto and Halifax. 

SOURCE: Aston Hill Asset Management Inc.

For further information:

Michael J. Killeen
President
Aston Hill Asset Management Inc.
(416) 583-2300


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