TORONTO, April 3, 2013 /CNW/ -
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
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
Expiry Date of
Aston Hill Advantage Bond Fund
April 30, 2029
Aston Hill Advantage Oil & Gas Income Fund
June 29, 2028
Aston Hill Advantage VIP Income Fund
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
Aston Hill Asset Management Inc.